#findahome

After years of it feeling almost impossible to find a home in Chicago, Illinois that fits your needs, things are changing for the better.

Nationally, inventory is growing, and that gives you more options for your move. But here’s what you need to know: that level of growth is going to vary based on where you live.

That’s especially true in local markets like Chicago, Illinois. And that’s why you need an agent’s local market expertise.

Here’s a quick rundown of the current inventory situation, so you know what’s happening and what to expect.

Significant Growth Across the Nation

Nationally, the number of homes for sale is rising – and that’s true in all regions of the country. That’s shown in this data from Realtor.com.

In each of the four regions, inventory is up at least 19% compared to the same time last year. In the West, it’s actually up almost 41% year-over-year (see graph below):

There are two main reasons for this increase:

● More sellers are listing their homes. Many homeowners have been waiting for mortgage rates to drop before making a move. Now, some have decided they can’t wait any longer. May had more new listings than any May in the past three years. ● Homes are taking longer to sell. That means listings are staying on the market longer, which increases the total number of homes available. In May, the typical home took 51 days to sell, much closer to what’s more typical for the market.

More homes for sale helps the market become more balanced. For the past few years, sellers have had the upper hand. Now, things are shifting. Nationally, it’s not a full-on buyer’s market yet, but it’s heading toward a healthier place, especially for homebuyers.

Danielle Hale, Chief Economist at Realtor.com, explains:

“The number of homes for sale is rising in many markets, giving shoppers more choices than they’ve had in years . . . the market is starting to rebalance.”

How Much Growth We’ve Seen Varies by Area

But how long it’s going to take to achieve true balance is going to vary by area. Some parts of the country are seeing inventory bounce all the way back to normal levels, while others haven’t grown quite that much yet — and Chicago, Illinois is seeing its own trends.

Let’s take a look at another graph. This time, we’ll compare the current data (what you already saw) to the last normal years in the housing market (2017-2019).

In this comparison, the green shows which regions are back at more typical levels for inventory based on the growth we’ve seen lately.

The red shows where things have improved, but are still well below the norm (see graph below):

Here’s what that means for you. Across the board, you have more options now than you would’ve just one year ago. And that’s a good thing. More choices mean it should be a bit easier to find a home you love.

But not all markets are the same – some will take a bit longer to get back to more typical levels. So, lean on a local agent to find out what the inventory situation looks like where you want to live.

They’ll be able to tell you how much growth they’ve seen locally and how to tailor your home search based on what’s available in that area. This is just one of the reasons a local agent’s perspective matters.

Bottom Line

Inventory is getting better, but how long it takes to get back to normal is going to be different based on where you’re looking to buy.

Let’s talk with trusted Real Estate Agents at KM Realty Group LLC, 111 N Wabash #1734, Chicago, IL 60602. Call (312) 283-0794 to discuss what’s happening in our local market and how it affects your next move.

Now that you’ve decided to buy a home and are ready to make it happen, it’s a good idea to plan ahead for the costs that are a typical part of the homebuying process. And while your down payment is probably the number one expense on your mind, don’t forget about closing costs. Here’s what you need to know.

What Are Closing Costs?

Simply put, your closing costs are the additional fees and payments you have to make at closing. And while they’ll vary based on the price of the home and how it’s being financed, every buyer has these, so they shouldn’t be a surprise. It’s just that some people forget to budget for them. According to Freddie Mac, this part of the homebuying process typically includes:

Application fees

Credit report fees

Loan origination fees

Appraisal fees

Home inspection fees

Title insurance

Homeowners Insurance

Survey fees

Attorney fees

Some of these are one-time expenses that are baked into your closing costs. Others, like homeowners’ insurance, are initial installment payments for ongoing responsibilities you’ll have once you take possession of the home.

How Much Are Closing Costs?

The same Freddie Mac article goes on to say:

“Closing costs vary greatly depending on your location and the price of your home. Typically, you should be prepared to pay between 2% and 5% of the home purchase price in closing fees.”

With that in mind, here’s how you can get an idea of what you’ll need to budget. Let’s say you find a home you want to purchase at today’s median price of $422,600. Based on the 2–5% Freddie Mac estimate, your closing fees could be between roughly $8,452 and $21,130.

But keep in mind, if you’re in the market for a home above or below this price range, your numbers will be higher or lower.

Tips To Reduce Your Closing Costs

If you’re wondering if there’s any way to inch that down a little bit, NerdWallet lists a few things that could help:

Negotiate with the Seller: Some sellers are willing to cover part or all of these expenses — especially since homes are staying on the market a bit longer now. Sellers may be more motivated to compromise, and you’ll find you have a bit more negotiation power. So don’t hesitate to ask them for concessions like paying for the home inspection or giving you a credit toward closing costs.

Shop Around for Home Insurance: Since rising home insurance is a challenge in many areas of the country right now, take the time to get a clear picture of all your options. Each insurance company offers their own policies and coverage, so get multiple quotes and see how they compare. Choosing a policy that provides reliable coverage at a competitive rate can make a difference.

Look into Closing Cost Assistance: Just like there are programs out there to help with your down payment, options exist to get support with closing costs too. While they’ll vary by area, there are programs for various income levels, certain professions, and specific towns or neighborhoods too. If you want to learn more, Experian says:

“Your real estate professional should be able to steer you toward applicable programs, and the U.S. Department of Housing and Urban Development (HUD) maintains a helpful resource for finding homebuying assistance programs in every state.”

Bottom Line

There’s no arguing this past year has been difficult for homebuyers. And if you’re someone who has started the process of searching for a home, maybe you put your search on hold because the challenges in today’s market felt like too much to tackle. You’re not alone in that. A Bright MLS study found some of the top reasons buyers paused their search in late 2023 and early 2024 were:

They couldn’t find anything in their price range

They didn’t have any successful offers or had difficulty competing

They couldn’t find the right home

If any of these sound like why you stopped looking, here’s what you need to know. The housing market is in a transition in the second half of 2024. Here are four reasons why this may be your chance to jump back in.

1. The Supply of Homes for Sale Is Growing

One of the most significant shifts in the market this year is how the months’ supply of homes for sale has increased. If you look at data from the National Association of Realtors (NAR), you’ll see how inventory has grown throughout 2024 (see graph below):

This graph shows the months’ supply of existing homes — homes that were previously lived in by another homeowner. The upward trend this year is clear.

This increase means you can find a home that suits your needs and preferences better. And if the biggest reason you put off your home search was difficulty finding the right home, this is a big relief.

2. There’s More New Home Construction

And if you still don’t see an existing home you like, another big opportunity lies in the rise of new home construction. Builders have worked to increase the supply of newly built homes this year. And they’ve turned their attention to crafting smaller, more affordable homes based on what’s most needed in today’s market. This helps address the long-standing issue of housing undersupply throughout the country, and those smaller homes also offset some of the affordability challenges you’re feeling today.

According to data from the Census and NAR, one in three homes on the market is a newly built home (see graph below):

This means that if you didn’t previously look at newly built homes as part of your search, you may have been cutting your pool of options by a third. Some builders are also offering incentives like buying down mortgage rates to make it easier for buyers to get a home that fits their budget.

So, consider talking to your agent about what builders offer in your area. Your agent’s expertise in builder reputations, contracts, and more will help you weigh your options.

3. Less Buyer Competition

Mortgage rates are still hovering around 7%, so buyer demand isn’t as fierce as it once was. And when you combine that with more housing supply, you have a better chance of avoiding an intense bidding war. Danielle Hale, Chief Economist at Realtor.com, highlights the positive trend for the latter half of 2024, saying:

“home shoppers who persist could see better conditions in the second half of the year, which tends to be somewhat less competitive seasonally, and might be even more so since inventory is likely to reach five-year highs.”

This creates a unique opportunity to find a home you want to buy with less stress and at a potentially better price.

4. Home Prices Are Moderating

Speaking of prices, home prices are also showing signs of moderation — and that’s a welcome shift after the rapid appreciation seen in recent years (see graph below):

This moderation is mostly due to supply and demand. Supply is growing, and demand is easing, so prices aren’t rising as fast. But make no mistake, that doesn’t mean prices are falling — they’re just growing at a more normal pace. You can see this in the graph. The bars still show prices increasing, just not as dramatic as before.

The average forecast for home price appreciation in 2024 is for positive growth around 3% to 5%, which aligns more with historical norms. That moderation means you are less likely to face the steep price increases we saw a few years ago.

The Opportunity in Front of You

If you’re ready and able to buy, you may find that the second half of 2024 is a bit easier to navigate. There are still challenges, but some of the biggest hurdles you’ve faced are improving as time passes.

On the other hand, you could choose to wait. But if you do, here’s the risk you run. As more buyers recognize the shift in the market, competition will grow again. Similarly, if mortgage rates do come down (as forecasts say), more buyers will flood back into the market. So, making a move now helps you take advantage of the current market conditions and get ahead of those other buyers.

Bottom Line

If you’ve put your dream of homeownership on hold, the second half of 2024 may be your chance to jump back in. Let’s connect to talk more about the opportunities you have in today’s market.

Buyers face challenges in any market — and today’s is no different. With higher mortgage rates and rising prices, plus the limited supply of homes for sale, there’s a lot to consider.

But, there’s one way to avoid getting tripped up — and that’s leaning on a real estate agent for the best possible advice. An expert’s insights will help you avoid some of the most common mistakes homebuyers are making right now.

Putting Off Pre-approval

As part of the homebuying process, a lender will look at your finances to figure out what they’re willing to loan you for your mortgage. This gives you a good idea of what you can borrow so you can really wrap your head around the financial side of things before you start looking at homes. While house hunting can be a lot more fun than talking about finances, you don’t want to do this out of order.

Make sure you get your pre-approval first. As CNET explains:

“if you wait to get preapproved until the last minute, you might be scrambling to contact a lender and miss the opportunity to put a bid on a home.”

Holding Out for Perfection

While you may have a long list of must-haves and nice-to-haves, you need to be realistic about your home search. Even though your ideal state is to find a home that checks every box, you may need to be willing to compromise — especially since inventory is still low. Plus, a home that has everything you want may be too pricey.

As Investopedia puts it:

“when you expect to find the perfect home, you could prolong the homebuying process by holding out for something better. or you could end up paying more for a home just because it meets all your needs.”

Instead, look for something that has most of your must-haves and good bones where you can add anything else you may need down the line.

Buying More House Than You Can Afford

With today’s mortgage rates and home prices, there’s no arguing it’s expensive to buy a home. And while it may be tempting to stretch your finances a bit further than you’re comfortable with to make sure you get the house, you want to avoid overextending your budget. Make sure you talk to your agent about how changing mortgage rates impact your monthly payment. Bankrate offers this advice:

“focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. just because you can qualify for a $300,000 loan doesn’t mean you can comfortably handle the monthly payments that come with it along with your other financial obligations. every borrower’s case is different, so factor in your whole financial profile when determining how much house you can afford.”

Not Working with a Local Real Estate Agent

This last one may be the most important of all. Buying a home is a process that involves a lot of steps: paperwork, negotiation, and more. Rather than take all of this on yourself, it’s a good idea to have a pro working with you. The right agent will reduce your stress and help the process go smoothly.

As CNET explains:

“attempting to buy a home without a real estate agent makes the process more arduous than it needs to be. a real estate agent can give you professional legal guidance, market expertise and support, which will save you time, money and stress. they can also increase your chances of finding the right home so you don’t have to spend hours scouring the internet for listings.”

Bottom Line

 Find them, explore them, and peek at them side-by-side. Search by any price-range, from ultra-exclusive to reasonable, in Los Angeles. If your interest goes beyond modern style homes, tour and compare multiple style homes, and get property details. 

With the AI-based tool, you can easily get homes in Los Angeles & California. 

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