Thinking about buying a home in Chicago? Now may be the perfect time for you to invest in Chicago real estate. From single family homes to condos to 2 flats, Chicago has a lot of options to fit your real estate needs. Here are some reasons you should think about purchasing Chicago real estate.
Interest Rates Are Low, But for How Long?
Interest rates have been pretty low for a while now as the real estate market continues to work its way through the aftermath of the recession from 2009. This has made it very affordable for those who want to jump into real estate to get their first property. As of today, home buyers are still taking advantage of this opportunity. According to CNBC.com, the number of mortgage applications is up 36% from last year. However, interest rates have gone up in the past month. There are some concerns that interest rates may rise again in the future, which makes now the perfect time to get in on the action while rates are at an affordable level.
In my opinion, the government will still do what it can to keep interest rates as low as possible in order keep the real estate market active. While home prices are continuing to increase (another reason why it is a good time to buy now), they are still no where near the level that they were in the 2000’s. While they not be able to hold the rates this low forever, it should remain low for the foreseeable future, or at least long enough for those ready to get into real estate to get a good deal.
Chicago Housing Inventory is Getting Better (More Homes to Choose From!)
For the last few years, the Chicago real estate market has been pretty low inventory of homes for sale when compared to the past. At the same time, because of the low interest rates, there are a lot of buyers who are ready to buy a home. The demand for homes is high, but the supply of homes is historically home. The main cause of this is the housing crash back in 2009. If you purchased a home in the 2000’s, chances are you paid a premium for the property. When home prices crashed in 2008-2009, many people went under water with their mortgages, meaning that they owed more on their property than what it would sell for.
Over the years, prices started to get closer to what they were before the crash. However, there are still a lot of people who owe a lot more than what their home will sell for. Even though they want to move, it is not worth it for them. Therefore, there just sit on the property. If you were wondering why it is hard to find the right property, this is definitely a huge factor.
The good news for buyers today is that it looks like the supply is finally starting to catch up to the demand for homes. According to Inman.com, Chicago’s market is finally starting to shift towards becoming more favorable to the home buyer. There are now more homes on the market for buyers to choose from, which gives buyers a better chance of finding that perfect property for them. Also, it lessens the chance of buyers running into the dreaded multiple offer situation, which is basically a bunch of buyers bidding over the one good property on the market. If you tried searching for a property before with no luck, now would be a good time to start looking again.
Rent Is Just Too High
While interest rates have been low, rental prices in Chicago real estate have been rising steadily. As a landlord, I’m not complaining at all. As a renter however, I would start thinking about alternative options, and if renting is really worth it. According to Curbed Chicago, the average cost of utilities and rent in Illinois is almost 1100 per month. While that may be less than a monthly mortgage for a similar home or condo, it really isn’t that far off. When you factor in the equity that you are building up in the property, the benefits of owning are becoming clearer by the day. I always tell people that you are going to pay someone for the roof over your head. When you own it, at least some of that money comes back to you.
As always, let me know if you have any questions or comments for me. Thanks and have a great day!