Sunday, October 26, 2014

The current real estate market in Skokie, IL

 Chicago area real estate appraiser Michael Walsh takes a look at the real estate market in the Village of Skokie using statistics from Midwest Real Estate Data the MRED MLS and finds lots of activity in One-Unit Housing, this includes both attached and detached homes.

According to the MLS in the last 30 days there were 91 new listings for One-Unit Housing, there were 71 closed sales and 79 listings went under contract.

In the last twelve months the median sales price for One-Unit Housing increased +14.7%, average marketing time declined -27.5% to 74 days on the market, and there is currently a 3.9 month supply of inventory. This level is considered in balance. REO & Short Sales account for approximately 30% of total sales.

Consumer confidence is key to the real estate market

A "Triple Dip" is forecast in real estate prices by the national appraisal management company Clear Capital. Their recent study concludes that "As consumer sentiment drops, national home prices follow"

 "Heading into fall, home price gains continue to drop," said Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. "September marks the 11th month of moderating gains with home price levels back in line with long run averages. With less fuel stoking investors' fire and the consumer yet to feel confident in the market, we expect at best either a return to pre-bubble norms or a departure into negative territory.

If improvements in the job market continue to support a rise in consumer confidence, it's likely that owner occupied buyers will be encouraged to pick up the slack in housing demand, once held steady by investors. While sentiment data is improving as of late, we've yet to see sentiment reach pre-recession levels. Even less encouraging, the index's rate of improvement is softening, alongside home price growth.

Without stronger rates of growth in consumer confidence, price gains could easily fall past the normalized annual rates of growth between 3%-5% and back into negative territory. This has the risk of invoking a negative feedback loop between falling prices and reduced confidence from potential homebuyers. While the housing market has enjoyed abnormally high rates of growth during the last two and a half years of recovery, prices are back to long run historic levels, signaling an effective end to the correction to the correction. True market growth will be dependent on consumer confidence and re-engagement which will be tested over the next few months."

This Month in Real Estate October 2014