Chicago housing market steady, if not stellar, Chase chief economist says
Despite gloomy forecasts, the local residential market has some factors working in its favor, Anthony Chan said
A slow end to the 2018 home-buying season and a dreary forecast for the 2019 market has some residential brokers on edge. But strong economic and market factors could give Chicago home sales a boost, said Anthony Chan, chief economist for Chase.
After years of rebounding home prices, the national housing market has seen some stalling of late, as high prices and low inventory have deterred some buyers.
But unlike some housing metro areas that have seen extreme highs and lows, Chicago’s market has remained even keeled, Chan said Tuesday at Chicago Agent’s Accelerate Summit 2019.
“Prices didn’t drop as much in Chicago, but they’re not going up as much, either,” Chan said.
“It’s a sign that the economy is somewhat steady. For people that don’t like a lot of risk and don’t like a lot of volatility, they like it.”
Home prices are rising locally by about 3 percent year-over-year. That’s in contrast to other markets where prices are rising much more rapidly. Chicago’s home prices are still 15 percent below their pre-recession highs, while prices have already recovered to their pre-crash peaks in other markets, Chan said.
The relatively slow home price growth combined with Chicago’s booming economy means this is still a strong market with good deals to be found, Chan said.
“It’s not really hard to sell real estate when you tell people that Chicago has a vibrant economy, the economy continues to grow, you’ve got an unemployment rate below the national average, and yet you can still get a good deal on real estate,” Chan said.
Despite the gloomy outlook for Chicago’s housing market, some positive factors have been recorded. Inventory is starting to rise. Millennials are starting to get into the market, and mortgage rates aren’t rising at the rate previously predicted, Chan said. Such factors could give the market a boost this year and beyond, he said.
“This is not a bad time to start considering buying a house,” he said, speaking to a room of brokers. “It really gives you an opportunity to practice your craft and show people what they want.”