Recently, economists at Zillow came out with a report that there will be a real estate recession in 2020, or even as early as late 2019. They are basing this on the assumption that interest rates will eventually rise, making it harder for buyers to afford homes and slowing down the demand.
However, they are predicting that the recession won’t be nearly as bad as the recession in 2008. For one, a lot of economists are predicting that, unlike 2008, real estate will not be the main cause of the recession. They are predicting that the recession will be cause by uncertainties with the stock market, as well as tensions with international trade.
A second reason is that mortgage lenders today are much stricter than when compared to 2008. Back then, no money down mortgages were very rampant, and they were very lenient when it comes down to pre approving buyers. I can tell you based on experience that lenders are still very strict today when it comes to qualifying buyer, so there isn’t a threat of homes defaulting and going into foreclosure.
As far as the Chicago real estate market, real estate has been steady for the past year. Home prices have risen by 1.8% in 2019, which is pretty flat. The average time for a home to go for sale to getting a contract has been steady at 45 days all year. What this tells me is that while the prices may not explode upwards like they have been in the last few years, prices are still remaining stable. There are still plenty of buyers looking to buy, and sellers looking to sell.
Also, for buyers, the competition has slowed down a bit, you will have a better chance on find your dream property. If you have been trying to find a home but was unsuccessful, now is the time to start up your search again. There will be more inventory for you to choose from, and you won’t run into as many bidding wars, which drives up the prices.
Any questions or comments, please feel free to contact me. Thanks and have a great day!