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Chicagoland Real Estate Market- Q1 2017 Summary

What a great start of the year for the Chicagoland real estate market!  Despite the rise in interest rates, the mortgage rates have not increased significantly and remained very much affordable.

Average Price

The number of closed transactions in 2017 is just slightly higher in comparison to the same period last year (25,149 vs 24,777), but the overall dollar volume of the closed transactions has increased significantly.  This indicates that the average price increase for all closed transactions in Q1 is 5.95%.  The average sales price in March alone was $277,693.  Townhouses contributed least to the price increase with an average townhouse increase of 2.9% over last year.  On the flipside, the highest price increase came from condos, where the average price increase was 10.9%.

Quarter 1 2017 2016 2015
Sales $        6,670,773,667 $        6,203,152,076 $        5,665,979,909
Transactions 25,149 24,777 23,665
Average Price $                    265,250 $                    250,359 $                    239,424
Average Price Increase YoY 5.95% 4.57%

Market Time

Average market time for closed properties in Q1 2017 dropped to 103 days, from 111 in 2016.  Townhouses and condos were selling as quickly as 83 days, while homes (defined as detached single dwellings), were selling in 113 days.  Interesting note is that the average market time for larger homes (3000sf+) has increased from 175 days in Q1 2016 to 190 days in Q1 2017.  Homes up to 2000sf, including condos and townhouses, appear to sell the quickest (89 days).

Month’s Supply

Month’s supply graph shows the number of months it would take to sell out the entire inventory of real estate currently on the market, at the current demand, without adding additional inventory.  Supply continues to be the biggest issue and concern in the market currently and it is what is driving the increase in prices.  The supply of real estate continued to shrink over the years and has reached a low of only 3.3 months.  This is the lowest supply in the area in decades.  The decrease came despite the increase in the number of new listings in Q1 of 2017.  The number of new listings hitting the market has increased by 1.2%, but a strong demand continues to absorb any good listings that hit the market.

Conclusion

We expect that the demand for the real estate in Chicago will continue to be strong in the near to medium term.  There is a limited amount of new construction producing the number of properties needed to fill the demand and the high rents are driving more and more millennials to transition into homeownership.  It is expected that the interest rates will continue to rise this year at a slow to moderate rate.  It is feasible that we will see a 30 year mortgage rate reach 5% by the end of the year.  Although this may discourage some buyers from purchasing, it may be balanced by reluctance of the current owners to sell their homes.  The reluctance will likely be the result of current homeowners hesitating to take on a higher interest rate on the new house (come on, who hasn’t locked in a 3.5% rate already??).  We expect that the balance between buyers and sellers will, in the near term, remain similar as it is now, with sellers driving the market.

 

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Chicago-Based Realtor, Enterprise Realty Brokers, Introduces Lower Listing Fees

Enterprise Realty Brokers believes that people pay too much to list and sell their homes. With the housing market in full recovery, this agency is setting new trends and helping homeowners put more money back in their pockets.

Chicago, IL – March 6, 2017 – With the real estate market continuing to improve, real estate agents are finding it more and more profitable to get back into this sector working full time. Though people do choose to sell by owner, the majority go through a well-established agency so they can take advantage of the MLS listings.

One of the big reasons people cite for not wanting to list with an agency is the commission that can be as high as 6% of the sale price. On homes worth a lot of money, this amount can be significant. For instance, a homeowner selling at $500k will pay about $30,000 simply for the listing and buyer’s agent’s fees.

Dan Cuckovic, the managing broker and owner of Enterprise Realty Brokers, a Chicago-based real estate company, recently stated that, “Considering the real estate market today, sellers should never agree to pay more than 4.5% commission.”

Cuckovic goes over the top three reasons for this statement:

  1. The Chicagoland market in 2017 is going to be a seller’s market. According to Midwest Real Estate Data service, the supply of real estate is at its 10-year low with only 4.2 months of supply available.  Month’s supply chart indicates the number of months it would take to sell off the entire real estate inventory currently on the market without any new properties being added.  Knowing this empowers sellers and gives them confidence that there will be a good to excellent demand for their property.
  2. Smaller agencies can provide excellent services without large corporate fees. Large corporate and office fees that big brand real estate firms charge their agents drive the commission percentages upwards.  Smaller, more specialized firms do not have these fees and their agents are at liberty to reduce their commission in order to obtain the listing, without sacrificing the quality of the services offered.
  3. Everyone is online. This goes for sellers, buyers and real estate agents.  The most important search tool for the homebuyer is the internet (according to the National Association of Realtors).  100% of buyers have at some point used the internet and it’s free to use.

Cuckovic also points out that websites like Zillow.com and Realtor.com offer free access and reliable information on all homes for sale in the Chicagoland area.  Any buyer searching for a new home will use these or similar sites.  Listing with any licensed real estate agent does put a home on the local Multiple Listing Service (MLS) network and it should show up on these and other websites. This service is expected to be offered by all agents, regardless of whether they are charging 6% or 3.5% commission.  While there are other means to reach buyers (open houses, social media and email campaigns), online presence is crucial.

For homeowners, these reduced real estate fees are very good news; it’s money they can put back in their pockets. The question that remains is how to find those agents that are willing to offer full services at a discounted rate.

Cuckovic offers this advice: “Do your research online and use services like Upnest.com or Hungryagent.com.  These websites have agents bid for your business, allowing you to interview and select the best agent at the most affordable price. In addition, approach your local family owned real estate firm and talk to them about discounting their fees.  If you are also buying your next property after the sale and you are open to using the same agent to find your next home, it is highly unlikely that any agent will say no.”

For more information, please visit: http://enterpriserb.com/

About Us

Enterprise Realty Brokers was founded in 2005 by Dan Cuckovic.  The company’s goal is to offer the best services possible to clients at the best possible prices.  They strive to go the extra mile to help clients achieve their real estate objectives.  They focus on helping clients sell and buy residential real estate in the areas of Cook, Lake and DuPage County. Enterprise has changed the playing field in real estate by focusing on technology and data to deliver the best services and results to clients.

Media Contact:

Enterprise Realty Brokers

2900 W. Irving Park Suite C2

Chicago, IL 60618 United States

[email protected]

773-999-9679

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Chicagoland Real Estate Market- Recap of the first 60 days

by Dan Cuckovic, Enterprise Realty Brokers

Chicagoland Real Estate Market is hot. In evaluating the market performance in the first 60 days of the year, conclusive with March 1st 2017, I noticed the sellers are definitely in charge of the market. I analyzed data obtained by Midwest Real Estate Data (MRED), which compiles real estate data from the northern Illinois, parts of northwest Indiana as well as southern Wisconsin.

Below is the analysis of the most important points regarding the real estate market in the first 60 days of 2017:

Activity

In the first 60 days the level of market activity was 14,418 closed transactions. In comparison to the 14,630 closed transactions in the same period of 2016 this is a 1.47% decline in activity. In comparison with 2015, when 13,378 transactions were closed in the same period, this is more than 7.7% increase.  The slight decline in activity in 2017 versus 2016 is mainly the result of the relatively low supply of real estate, which is below the 2016 and 2015 levels.

Price

The average selling price continues to rise. In the first 60 days the average sales price in the MRED territory rose by 6.00%. While this increase is at the slower pace than the increase of 2016 in comparison to the increase in 2015 (7.61%), the increase is still solid. In my opinion the increase will continue to happen as long as there is a solid market demand and the supply remains low to moderate.

Average Market Time

Average market time at the end of February was 107 days which is 7 days less than the same period in 2016 and 11 days less than 2015. As stated, the low supply and good demand are causing the properties to be sold quickly.

In summary, the real estate market in Chicago remains strong and I anticipate that 2017 will be a solid real estate year. While there are many unknowns ahead of us (new President, likely increase in interest rates, etc.), I am confident that the homeowners have much to look forward to.

 

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Market Outlook 2017

Chicago market continued to be strong in 2016.  Chart below shows the overall median sales price increase of 7.1% over the same period in 2015.  We look forward to an even stronger 2017.

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Chicagoland Markets

According to the latest data from MLS, prices of detached homes in the Chicagoland continue to be on the raise.  It is anticipated that the prices in Spring 2016 will reach highest point in over five years.  Refer to the graph below for details.  If you are planning on selling your house this Spring contact us for the latest statistics and projections in your market.

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Arlington Heights, IL- Seller’s market

According to the recent analysis, Arlington Height still shows very good signs of a seller’s market.  Although a level of supply of all homes has increased in the latter 2015, it is still lower than the overall Chicagoland market.  This is measured by the month’s supply of real estate homes.  Currently, if there were to be no more listings added in Arlington Heights, the current supply of real estate would sell out in 3.9 months versus 5 months for the Chicagoland area.  If you would like to know more about your local market, visit our facebook page where you can get all the market statistics for every Chicagoland market.