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2023 Chicagoland Real Estate Market Outlook

If you’re a Chicagoland resident and think you’ve missed your chance to own a home, think again. 

Pundits are eager to share dire predictions for this coming year, but the reality is that our market remains healthy and what we’re seeing is much closer to a return to normal, and not a drastic drop.

The coming year also has nothing in common with the housing crash of 2008. There’s still a shortage of available homes (although we’re beginning to see a little more balance), and lenders have significantly raised their standards for qualifying for a mortgage loan. 

No matter what the conventional wisdom might say, now is a great time to become a homeowner and start building equity. Read on to learn more about what 2023 holds for prospective buyers, real estate agents, and other industry professionals.

Don’t Let Rising Rates Deter Your Dreams

There’s a pithy saying that’s gained popularity this year — “marry the house, date the rate.” 

What does that even mean? Interest rates are currently on the higher end, but they’re likely to come back down to more appealing numbers relatively soon. The Mortgage Bankers Association predicts that 30-year mortgage rates will drop to around 5.2 percent by the end of 2023.

If you can afford to pay a bit more upfront, you’ll be able to refinance your loan at a later date and reap the benefits of today’s prices and tomorrow’s interest rates. 

The important thing is to lock in the ideal home and sign on the dotted line.

Higher interest rates mean there’s less competition for available properties. While the rest of the country might begin to see a lessening of the housing shortage, the Chicagoland market remains quite steady. The Midwest is becoming popular for remote workers looking for more affordable alternatives to California and the East Coast. Chicago’s median home price is some $40K under the national average.

Current renters who are looking to make the switch to owning property may decide that 2023 is their year. The first step for hopeful home shoppers is to thoroughly review their finances and speak with a knowledgeable and experienced mortgage lender. Your lender can advise you on how to find the best deal today as well as when you might be able to refinance your home to a more advantageous rate.

It pays to do your research. There are many programs for first-time home buyers in Chicago and the state of Illinois that can help you afford a down payment and closing costs. 

Keep in mind that it’s crucial to not overextend yourself in anticipation of refinancing in a few months. Your lender will help you find the ideal loan product for your specific situation.

Finding Your Leverage

We’ve been in a serious seller’s market for a while now, with buyers engaging in bidding wars, forgoing home inspections, and pursuing other unwise strategies just to snag a home. 

With the National Association of Realtors reporting that pending home sales nationwide have dropped for the 5th straight month, that’s no longer quite the case anymore. Sellers will have to work a bit harder to attract the offers they want to see.

As homes sit on the market for longer periods of time, sellers will become more amenable to negotiation. Buyers will gain more purchasing power as prices normalize, while those on the opposite side of the table can still expect to get a satisfactory return on their investment.

More homeowners will consider selling in 2023, and the increase in inventory will help buyers have more options. Emerging solutions to the supply chain issues of the past couple of years will result in more newly-built homes being listed as well. 

This rise in inventory and the slowing of the home-buying frenzy means motivated sellers will need to up their game to get the best price. Move-in-ready properties will have a distinct advantage over ones that need a lot of work. 

The Importance of the Right Team

Although the outlook is relatively bright for both buyers and sellers in the Chicagoland area, it’s vital to work with a top real estate team that has in-depth local knowledge and makes your best interests a priority.

A somewhat calmer and more sustainable market means that your agent has more time to devote to pairing you with the perfect property. Mortgage lenders are also more willing to work with you to find creative financing options

Remember to first do your due diligence in reviewing your finances to determine if you can afford to purchase a home in 2023. Once you’ve decided to take the plunge, get your documentation in order and speak with a lender to get pre-approved for a mortgage loan. This will show sellers that you mean business and that you’re in a position to buy now.

Finding the right agent and real estate attorney will ensure that you can move quickly when you come upon the home you’ve always wanted. Asking your friends and family is a great way to start your search. A glowing review from someone you trust is a good indicator of an agent’s effectiveness.

If you’re ready to start exploring your options for owning a home anywhere in Chicago, give me a call. I can help you understand and navigate the process and make your dreams of home ownership a reality!

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