The New Normal Feeling
A Bit More...Well...Normal
Over the last few years, there has been a lot of talk in real estate circles about "the New Normal." At first, the New Normal meant the days of double-digit price appreciation were over. Then the financial crisis hit, and suddenly the New Normal became a barrage of bad news that seemed to never end. Eventually, the economy started to regain its footing, the Housing Tax Credit took hold, and the Chicago real estate market enjoyed a rally through the spring of 2010. Today, the tax credit is gone, and while trouble spots remain, the general sentiment is the worst is behind us. Finally, the New Normal is starting to feel a bit more...normal.
A number of data points support the trend toward normalization. Home prices as tracked by the Case Shiller index have returned to the historical trend line, and April marked the 12th straight month of improvement in the Chicago index. Though the data still shows a year-over-year price decline in the city, the fall-off has slowed dramatically. The inventory picture is also far more stable with a 10.4 month supply of homes on the market - a reduction of about 50 percent since June 2008.
The city housing market remains challenging, but equilibrium is slowly returning, which means today's low prices and record-low mortgage rates make the next six to twelve months a prime opportunity - especially for first-time and move-up buyers.
#1 in Chicago
Yet another phenomenon that is becoming the norm is seeing @properties atop the Chicago real estate market. Through the halfway point of 2010, in the city, @properties was #1 in total transactions, #1 in shortest average market time, #1 in dollar volume sold, and #1 in market share. We continue to gain strength, add marketing programs and increase our level of service for Chicago homebuyers and sellers - all of which gives our clients a distinct advantage in the marketplace. Thank you for making @properties #1.
I'd be delighted to help you gain (or regain) perspective on the real estate market in your area. Please feel free to contact me anytime. And if someone you know is looking to buy or sell a home, remember that I always appreciate your referrals.
Dave Straub
Realtor,@properties
Illinois Licensed Real Estate Salesperson
Member, NAR, IAR, CAR, MLS
773.255.3180 DIRECT
Thursday, July 15, 2010
Friday, July 2, 2010
Drop in Interest Rates
Drop in Interest Rates
a Welcome Surprise
Just about everyone (myself included) expected mortgage interest rates to rise when the Treasury Department ended its $1.25 trillion purchase of mortgage-backed securities in March. But Europe's ongoing debt crisis has driven investors to the safety of Treasury notes, a benchmark for mortgage interest rates. And as the yield on Treasuries has come down so too have mortgages. Bankrate.com, a website that tracks interest rates, said it was hard to identify the last time mortgage rates were this low, but estimates put the timeline in the fall of 1956. Sock hop, anyone?
This latest development should come as welcome news to both home buyers and sellers. For buyers, today's interest rates could be even more valuable than the recently expired Federal Housing Tax Credit. The chart below compares today's interest rates with those from a year ago to illustrate the monthly, annual, 5-year and 10-year savings for a range of conforming and jumbo loan amounts. On loans upwards of $300,000, the 5-year savings exceed the maximum $8,000 tax credit. On jumbo loans, the savings are far more substantial.
Sellers also have reason to cheer the recent drop in rates. Bearish housing analysts predicted that the absence of the tax credit and an anticipated spike in interest rates would put new downward pressure on prices, which have begun to tick up in many markets and submarkets. With rates moving in the other direction, cheap money should help buoy prices - hopefully until the Europe situation and U.S. employment picture begin to brighten. Lower rates also create a wider pool of home buyers and should provide a sense of urgency to house hunters who are in the market this summer.
Source: Bankrate.com 30-year fixed-rate mortgage index, 6/23/10
For more information on how today's historically low interest rates affect your buying power or selling strategy, feel free to contact me. And remember, I always appreciate your referrals.
Dave Straub
Realtor,@properties
Illinois Licensed Real Estate Salesperson
Member, NAR, IAR, CAR, MLS
773.255.3180
a Welcome Surprise
Just about everyone (myself included) expected mortgage interest rates to rise when the Treasury Department ended its $1.25 trillion purchase of mortgage-backed securities in March. But Europe's ongoing debt crisis has driven investors to the safety of Treasury notes, a benchmark for mortgage interest rates. And as the yield on Treasuries has come down so too have mortgages. Bankrate.com, a website that tracks interest rates, said it was hard to identify the last time mortgage rates were this low, but estimates put the timeline in the fall of 1956. Sock hop, anyone?
This latest development should come as welcome news to both home buyers and sellers. For buyers, today's interest rates could be even more valuable than the recently expired Federal Housing Tax Credit. The chart below compares today's interest rates with those from a year ago to illustrate the monthly, annual, 5-year and 10-year savings for a range of conforming and jumbo loan amounts. On loans upwards of $300,000, the 5-year savings exceed the maximum $8,000 tax credit. On jumbo loans, the savings are far more substantial.
Sellers also have reason to cheer the recent drop in rates. Bearish housing analysts predicted that the absence of the tax credit and an anticipated spike in interest rates would put new downward pressure on prices, which have begun to tick up in many markets and submarkets. With rates moving in the other direction, cheap money should help buoy prices - hopefully until the Europe situation and U.S. employment picture begin to brighten. Lower rates also create a wider pool of home buyers and should provide a sense of urgency to house hunters who are in the market this summer.
Source: Bankrate.com 30-year fixed-rate mortgage index, 6/23/10
For more information on how today's historically low interest rates affect your buying power or selling strategy, feel free to contact me. And remember, I always appreciate your referrals.
Dave Straub
Realtor,@properties
Illinois Licensed Real Estate Salesperson
Member, NAR, IAR, CAR, MLS
773.255.3180
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