Will The Real Estate Market Slow Down This Fall?
In normal times, the end of summer brings a slowdown to market activity in residential real estate. While traditional seasonality has obviously taken a backseat since the pandemic, there are signs it could be on its way back
It’s true that the local market has begun to show some signs of slowdown. Illinois Realtors data showed an August decrease in total homes sold of 2.5 percent in the nine-county Chicago area. Chicago itself saw a decline of 1.4 percent. Both figures were in line with a nationwide decrease of about two percent for August. While price appreciation over the previous year continues, the rates of growth are down.
But that’s not to say things are slow, at all. Remember that those declining August 2021 figures are compared to outrageous post-shutdown numbers from August 2020. The August 2021 figure for total Chicagoland homes sold was still a 13.8 percent increase over the August average between 2015 and 2019, with the city figure being a 4.7 percent increase. Price appreciation is no longer in double digits, but August 2021’s 7.1 percent figure for Chicagoland still beat almost any single month between 2015 and 2019. The impacts of the low inventory seen for many months even made it to the luxury market, which has been breaking records this year.
Getting back to seasonality, inventory could be the key differentiator this year. Under normal seasonality, inventory also increases in the warmer months before falling modestly downward in the fall. This year, inventory has just begun rebounding now, and the average number of days listings are spending on the market are increasing. While the end of pandemic-era mortgage protections this winter isn’t expected to have a huge impact on the local market, the resulting foreclosures will add further inventory.
Seasonality may not be all the way back, and home price appreciation may continue. Increasing inventory, though, is unequivocally good news for buyers. If you’ve been waiting out the busy market for things to cool down but still want to take advantage of low interest rates, the upcoming months could be the ideal time to pounce. Consult with your agent to make a game plan.