Steadily rising home prices in Chicagoland have become glaringly apparent in the north suburbs.
In Park Ridge, the average asking price has topped $1 million for the first time ever, the Chicago Tribune reported, citing comments from @properties agent Ralph Milito. Prices are also on the rise in suburbs such as Skokie and Niles.
Low inventory is the primary driver behind the trend. Homeowners are hesitant to sell, knowing that purchasing a new home would mean braving the current high mortgage-rate environment. The few mid-priced homes available are selling quickly and often above the asking price, creating a frustrating environment for many buyers.
“I’ve had buyers write over asking price offers numerous times and still not land a house,” Milito told the outlet.
Milito noted that homes priced at or above $1.5 million are moving slower, contributing to the higher average asking prices as they linger on the market. As of June 18, Park Ridge had 69 homes for sale, including 22 private listings, with an average asking price of $1,027,000. That’s considerably less inventory compared to previous years.
In nearby Niles, the situation is even more strained with only 24 homes listed, averaging $572,442. Skokie had 45 homes listed with an average price of $617,068.
Kathleen O’Sullivan, a Berkshire Hathaway agent, reported selling homes in Skokie and Niles in the $350,000 to $500,000 range within a month. Park Ridge homes in the $600,000 to $700,000 range are also selling quickly.
While rising home prices may be seen as a positive for potential sellers, high interest rates– currently hovering between 7 and 7.5 percent for a 30-year fixed-rate mortgage–are working against sellers who need to finance a new home. In some instances, mortgage payments are nearly double compared to rates seen just four years ago, O’Sullivan said.
Carol Harczak of Re/Max AllStars in Niles noted that sellers are often those with limited alternatives, such as estates or retirees.
Rental prices in Park Ridge have also surged, with average prices ranging from $2,300 to $3,200 a month due to the dearth of available homes for sale, the outlet reported.
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Real estate agents are advising buyers to purchase homes as soon as possible and consider refinancing when rates drop, rather than waiting for an ideal market condition.
Federal Reserve officials recently indicated plans to reduce mortgage rates to the 5 to 5.25 percent range. Milito anticipates that while lower rates may increase demand, they’re unlikely to boost inventory levels significantly, as many homeowners will retain their lower-rate mortgages from 2020.
—Quinn Donoghue