I have been reading headlines referring to the slowdown of the real estate market in Chicago and surrounding suburbs. It is actually affecting most of the nation. The party is certainly over.
First off, most buyers have made their purchasing decision within the past 5 years when interest rates were at record lows. I personally believe these low interest rates will cause buyers to remain in their homes longer than usual because it will be difficult to give up those low rates unless they absolutely have to move because of a job change, growing family, downsizing, divorce, etc. This will affect the real estate industry years down the road.
There is always a slackening in sales around this time of year because most families have made their purchase so their children can begin the school year at their new schools. This happens every year and real estate is always seasonal, especially in our Chicago and suburban area. It is definitely a buyer's market. Sellers need to change their frame of mind and it isn't always easy to convey this to sellers who have seen the quick success of friends, family and neighbors that sold during the peak market of the past 5 years.
Investors are also feeling the pinch, especially those that purchased a property for a quick "flip." Many are having to keep these properties and rent them out. Some are facing financial difficulties because of the current market.
Even "hot" areas are feeling the downturn. Arizona, Las Vegas, Florida and popular California areas are showing slower sales, less buyers, price reductions and longer market time. In fact, some of these areas have been hit harder than the Midwest since they were so active and agents and sellers are just not used to being in a stagnating market.
Remember, a property will sell in any market. You just need to adjust to the current market you're in. This will usually mean you have to list your property lower than you were hoping for. You also need to make it look the best in the price range and might need to make some updates or reduce your price accordingly. I'll go into more detail in a follow-up post.
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