As Real Estate Prices Climb, So Do Your OptionsMarch 23, 2021
We may still be awaiting a sustained spring thaw, but the real estate market throughout the Chicago area is hot, hot, hot—and has been for the better part of the past year.
While the COVID-19 pandemic devastated certain sectors, including restaurant, retail and performing arts, it’s had the opposite affect on residential sales. The number of home sales spiked late last spring, when COVID-19 restrictions began to let up, and has yet to slow down—and home prices along with it.
The number of homes sold in the nine-county Chicago metro area totaled 120,256 in 2020—an 8.8% increase that is the highest since 2012. The median price of homes sold last year increased 8.1%, which was the biggest increase since 2015. In contrast, the 2019 increase in metro area home prices was less than 4%.
And January, which is usually a lackluster month, saw a 20.5% spike in home sales in 2021 compared to the year earlier. It was the best January performance since at least 2008. The median sale price jumped by 16.5%–the biggest monthly increase since January 2014.
And it’s not just happening in Chicagoland. The number of homes sold in the U.S. increased by 23.7% year over year.
What is the magic fueling the numbers? The potent combination of COVID-19 and low interest rates. The former convinced Americans that they need lockdown-friendly homes with more home office and study-at-home spaces plus enough room for the family to spread out. The latter made the dream a reality. In short, the market created by this magic has defied expectations for nearly a year, and seems poised to continue that up, up and away trajectory.
A third factor also has played into the growth scenario—the number of available houses on the market. The current inventory is the tightest in 13 years, with only enough homes for sale to keep the market humming for 1.8 months. A four-to-six-month supply is considered a good balance between supply and demand. Part of the problem is that Chicago area homeowners have less equity in their homes—18%–than those in other big cities, where the rate averages 23%.
If you’re among those wondering whether now is the time to sell, it’s important to consider the outlook for the rest of the year. The forecast through April suggests a 9.6% to 12.9% increase in Chicago metro area home sales. But it’s also important to consider broader trends, such as the unemployment rate—which fell to 6.3% in January—and a new Redfin report that indicates a third of U.S. homebuyers would move if employers were to give them the option of permanent remote work.
But it isn’t just current workers who are mulling a move in the current hot housing market. Baby boomers, who are now in their 60s and 70s, hold about two-thirds of the nation’s home equity—and many of them are poised to make a change. After all, some 70% of Americans older than 65 will someday require long-term care services—and that population is expected to grow to 74.1 million in 2030 from the current 47.8 million.
That’s why the next move is so important, and so is the timing of that move. With house prices seeing month-to-month increases, now might be the ideal time to consider a Life Plan Community that offers a continuum of care—from independent living to memory and nursing care, should that become necessary.
Monarch Landing, with its beautiful 60-acre campus, cheerful apartments, restaurant-quality dining, and beckoning workout spaces and amenities, offers the full range of health services and much more.
What’s that old saying—strike while the iron is hot? That might be the perfect advice for making a change while the local real estate market is at its blistering best.