After a flat spring market, what’s in store for Northern Illinois for the rest of 2011? There are some factors that will be starting to influence prices and activity in the region beginning now – the most important being the rate of new foreclosures. Recent statistics show we’re currently at a 44 month low for new foreclosure filings. Also, the “shadow inventory” that was the big worry this spring has yet to materialize and many now believe that it was largely hype. As you can see from the graph, our downward slide in median price bottomed in May and since then we’ve seen things move up a bit. Any real estate agent would expect that to continue through this fall with perhaps a leveling off during the winter months. It remains to be seen what the current turmoil with the financial markets, uncertainty with Europe and the threat of a double-dip recession will do, if anything. I honestly don’t attribute our improvements since May to an increase in the number of new buyers – more of a combination of pent-up demand, fewer foreclosures and time of the year. There are lots of buyers “bottom shopping” this market – snatching up any juicy deals that come through. That’s causing an interesting situation where homes at certain price points are selling in days with multiple offers while others sit un-touched. For selling your house in Warner Robins fast, you can also try to work with Mid Georgia House Buyers who promise to close the deal in no time. Often the foreclosures in this market are garnering a lot of attention because they represent a quick purchase opportunity at great prices.
Currently, we’re seeing fewer foreclosures hit the market – good news for the health of the market but bad news for buyers looking for these quick-closing homes. This is contributing to many of the multiple offer situations that foreclosures are attracting. As buyers wait and wait for those juicy deals to come around, many will decide to go with short sales or traditional sales and start their research current Irvine homes for sale rather than waiting for long and missing out on these exceptional homes. This is slowly driving up the median sales price – because many buyers that are looking to stay to a timetable just aren’t finding a huge surplus of foreclosures to purchase and must consider short sales and traditional sales that are more often priced higher. When the balance begins to tip further and the supply of foreclosures continues to drop, we’ll begin to see an upwards correction as the low-priced homes get sucked out of the market even quicker. This correction won’t be extreme but it could accelerate the market as buyers realize that we’re heading away from the market bottom. The biggest question is, when? Although the market will perhaps flatten off during the winter months or maybe decline slightly, I don’t see this correction happening until mid-to-late 2012 because it takes perhaps a year for foreclosures to work their way onto the market from the filings. The fed’s latest announcement about keeping the overnight rate low until at least 2013 and the uncertainty with stocks should drive money into bonds so there should be plenty of cheap money to fund mortgages. If we can avoid some big mistakes with QRM legislation this fall, all this will continue to make 2012 an attractive time to buy.