North Shore Housing Market Update

North Shore Housing Market Update

First Quarter 2014

Stephanie Hofman, Realtor®, Coldwell Banker Residential Brokerage

“So, how’s the market?”

I’m asked this question constantly – in the aisles at Target, while serving hot lunch at my kids’ schools (by the other volunteers, not kids!) and by a friends and clients just calling to chat.

So how IS the 2014 housing market on the North Shore?

Pretty good, actually – it’s starting off slowly, in large part due to to the never-ending winter we’ve faced, but it’s still solid and optimistic.

The total number of closed properties during the first quarter of this year was 431, just about even with last year’s number of closings. But there was a big difference in the number of days those homes spent on the market before selling: just 117 days this year as opposed to 168 days in the first quarter of 2013 – a difference of 30%!

Certainly this is a reflection of the lack of inventory this year as compared with last, which continues to plague the market as we move into the second quarter. Buyers are out there and confident, likely wanting to secure homes before interest rates creep up, but as choices are limited, well-priced homes in good condition are selling quickly – and at higher prices than last year.

The average sale price increased in the first quarter of 2014 – from $611,557 in 2013 up to $746,418 this year. The price increase is driven by the dearth of inventory as well as the uptick in sales of $1,000,000+ properties: closed units in this category are up 30% from 2013 while sales of homes below $500,000 are down 21% from the same time frame last year.

The first-time home buyer market is sluggish – as evidenced by the drop in purchases under $500,000 – so to provide some stimulus, the state of Illinois has created a new program aimed a qualified first-time home buyers who are purchasing properties under $400,000. Called “Welcome Home Illinois,” first-time homebuyers, as well as those that haven’t owned a home for three years, can obtain $7,500 in down-payment assistance with an interest rate of as low as 3.75%.

The program addresses a significant reduction in home purchases by first-time home buyers in the state. The percentage of first-time home buyers has dropped from 40% in 2008 to only 21% in 2013. The state effort emulates the federal program initiated in 2008 that provided up to an $8,000 tax credit to first-time home buyers.

Overall, the market is getting healthier. Days on market is down and prices are up. Inventory is lower, creating strong demand, the number of distressed properties on the market (short sales and foreclosures) is down, and new construction is back–not just custom homes, but beautiful spec homes are popping up all over the North Shore.

So if you’re thinking about selling, now is a the perfect time – as we thaw out from the winter, there is a pool of buyers ready to make their move, leading to increased demand and higher prices.

Stephanie Hofman is real estate broker with Coldwell Banker in Highland Park who acts as her clients’ guide, advocate and educator throughout the entire home buying/

selling process and believes in the power of information to make the best decisions possible. Find out more at www.StephanieHofmanHomes.com or call her at 847-652-1902.