We are halfway through 2019 already, can you believe it? One of my favorite parts of working in real estate is that every year is a totally new experience. Buyers market, seller’s market, the global economy, politics--the recipe is never the same. And as a result, I am always learning. I recently sat down to think about what we’ve seen out of the market so far in 2019 and put together my thoughts. A few years ago, it was all go, go go--properties were flying off the market. This year things have definitely moved a little slower, but there are some major high points too.
Global uncertainty + interest rates
For better or for worse, our current administration is not afraid to shake things up on an international scale. In the first quarter, we saw the impact of the unresolved trade disputes with China and the resulting economic sanctions. In the second quarter, the economic sanctions widened to Mexico and India. The trickle down to our markets was less of a trickle and more of a sudden wave. On the plus side though, the Federal Reserve attempted to counteract and temper the negative impacts of the sanctions by maintaining interest rates at 18 month lows. We’ve also seen strong economic growth amidst the trade drama with the GDP over 3%.
Financing is readily available to buyers, and mortgages are fairly easy to obtain. This is a very important factor to the health of our market because we are also seeing fewer buyers seeking properties. Another bright spot of the 2019 market is the appraisal instability we saw in 2018 seems to have resolved. 2018’s market was filled with high high’s and low low’s, and home values and the valuation process lagged. Resultantly, we saw a lot of appraisal issues stack up.
While real estate is always a local game, when a market is transitioning —like our’s is now—this is especially true. For example, median sales price in Lincoln Park is up 3.8% across all property types. But if you break that down further, attached housing is up 2.2% and detached housing is down 5.8%.
Buyers + sellers
Here is Chicago, the market has shrunk, slightly. We have fewer listings on the market, and also less buyers. What this means for both buyers and sellers is that you have to work hard. For buyers, your competition is intense. Buyers on the market are serious and looking to make a deal. Make sure you are prepared with a pre-approval, and a clear vision of what you are after.
For sellers, putting your best foot forward is as important as ever. Spending the extra time and money painting, staging, cleaning, and clearing to make sure your online photos pop against the competition. As far as pricing, it is crucial to price to the market right out of the gate. Smart sellers and their real estate brokers are making price adjustments in a timely manner, so you should too. You and your real estate broker should be monitoring the market on a weekly basis and adjust as necessary. My sellers know they receive a weekly report from me each week outlining market activity and a plan forward.
I consider it a big part of my job to stay on top of the market and all its implications. If you ever have questions or would like to discuss further, please reach out any time. I could take about this stuff for hours!