Chicagoland Real Estate Market Update

Market Update courtesy of Steve Budzik managing broker of iCandy Realty

 Steve Budzik Headshot

As we move in to spring of 2017 the real estate market is heating up in most markets, while we see a slow down or even a decline in others. Markets like Lincoln Park are actually declining based on the amount of inventory and I’m sure the recent tax hike has a play on this.

We also see a decline in distressed inventory which leads to more competition for investors when looking to buy properties listed off the MLS. This does not mean there are no deals to be had on the MLS but you have to be more aggressive with your terms and quick to pull the trigger, great deals are gone within hours of hitting the MLS. This has lead more investor to start looking for off market properties by networking with wholesaler or doing marketing for sellers themselves.

2017 will also be interesting to see what happens with the interest rates as this will have an impact on how much a buyer can afford. The days of 3.75% rates are gone, currently we are seeing rates between 4.25%-4.50% depending on the type of financing and terms of the loan. The federal reserves have stated that they will raise the rate in 2017, we shall see where the rate ends up by the end of the year. Keep in mind rats in the mid to high 4% are still below the average which is 6%.

A new wave of retail buyers has entered the market about a month ago and with inventory low, homes that are priced right and marketed correctly have been receiving multiple offers as these buyers have been looking for the last 3 months and very little has hit the market. These areas are not typically the high end markets as stated above we are seeing a decline in some of these markets or longer days on market with more competition from their neighbors as they look to sell.

springhouse

In my opinion 2017 will be a great year for rehabbing and selling homes, just be sure to know the market that you are working in. The residential rental market is also strong with rents at all time highs and home ownership on a slight decline from 2016, this telling us that more people are renting then buying. Knowing your market is again just as important or even more important based on your strategy or length of hold time.

The question you have to ask yourself is: Are you going to rent to a section 8 voucher holder or not. If you are, I would advise you to educate yourself on the process.

As you know, there are pros and cons to everything and the same is to be said about renting section 8 voucher holder.

Things to consider:

-        You will have annual inspections

-        Section 8 may pay more

-        Communication delay when dealing with section 8

-        Rent can be negotiated once you submit your paperwork to section 8 office.

 

This is usually based off the what other units or SFH are selling for in the area. You will also want to become aware that section 8 is divided into to, HACC (Housing Authority Cook County and CHA Chicago Housing Authority. HACC is responsible for all properties that are within Cook County outside the City limits and CHA is responsible for all properties within the City limits. They have classes that you can take as a landlord to become more knowledgable.

The agents at iCandy Realty are truly top-notch. They are incredibly knowledgeable and helpful. If you’re looking for a realtor, we highly recommend this team.

 

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