The scorching hot market seen these past couple years is finally showing signs of slowing down as the interest rate hikes enacted by the Federal Reserve bare their consequence. The biggest question I’m seeing from buyers today is whether they should wait for a potential price drop before diving into homeownership or pull the trigger now before interest rates (potentially) go up even more. While my general piece of advice for buyers is that time IN the market beats attempting to time the market (especially if you plan on living in the home for several years), here are some of my predictions for the Chicago area real estate market.
Will we see price reductions?
Before diving in it’s important to note that every neighborhood is different. While we can report general trends from the area, it’s no secret that some communities experience higher demand than others. With demand naturally decreasing as a result of the Federal Reserve interest hikes, many eager buyers are wondering when we’re going to see a massive drop in price. The reality is that given the historically low inventory for the Chicagoland market, it’s unlikely prices are going to drop much in the coming year.
Note: The month’s supply stat (also known as Absorption Rate) shows how long it would take to sell all the homes that are currently on the market given the current amount of closed sales. Traditionally, a balanced market hovers between 4-7 months. The 1.7 reported at the end of 2022 marks the lowest on record.
Will 2023 be a buyers’ market or a sellers’ market in Chicago?
The slowing demand given increased interest rates will shift the market to a more balanced state in the coming year. Buyers should expect a bit of reprieve given they’ll be competing with less offers when bidding on their dream home. Additionally, homeowners asking for top dollar prices may find their home sitting on the market longer than the previous years – but it’s worth noting that market time is at record lows for homeowners in the Chicagoland area.
With all that said, if you’re in a situation where you’re ready to buy or need to sell – working with the right agent can go a long way in making sure you get the most regardless of the market. While these numbers represent the area as a whole, there are A LOT of opportunities out there for buyers and sellers alike. If you’re considering a move in 2023, let’s talk!