Experts predict home prices to slow on the North Shore

This is a paid post contributed by a Patch Community Partner. The views expressed in this post are the author's own, and the information presented has not been verified by Patch.

Dear friends and clients,

Home price growth has accelerated in the past year as buyers frantically competed for a limited number of houses on the market. Prices continue to increase and break records as strong demand collides with low supply. Sales of new and existing homes have declined somewhat in the past few months, mainly due to those sky-high prices.

Peter Boockvar, chief investment officer at Bleakley Advisory Group said, “We have a major affordability issue, especially for the first-time buyer, that is only partly mitigated by low mortgage rates.” About half of houses sold are still closing above the original listing price. The median existing home sales price in June rose 23.4% from June 2020, the National Association of Realtors reported.

“There’s probably some sticker shock happening out there,” said Hilla Sferruzza, chief financial officer at Home Builder Meritage Homes Corp. However, experts predict home price growth to slow by the end of the summer, as the availability of new listings helps relieve some of the pressure brought by competing buyers. In June, Lawrence Yun, NAR’s chief economist said, “Home price growth will steadily moderate with increased supply, but a broad and prolonged decline in prices is unlikely.”

In our North Shore market, prices increased slightly from March to June of 2021, however, the increase was lower than the national average - around 14% for all of 2021 compared to 2020. Bidding wars were commonplace for a few short months, with the market now correcting itself and tapering off. We are seeing a return to a steady, consistent pace with increasing inventory.

Many buyers who had sought to purchase in Northbrook set aside those plans to make alternative arrangements when the competition was fierce, and now we are encountering longer market list times for homes of all types in the area.

With home supply slowly improving, those considering selling may want to get their houses on the market sooner rather than later to get the best price. While the “rush” is not there as it had been this Spring and early Summer, buyers are back to looking for homes in the North Shore and with recent sales fetching higher prices, the market is still favorable for sellers.

The current housing market is being driven by three main factors. First, millennials are now the largest generation in the country, and they’re enlarging their families and buying homes. “We anticipate that millennials will continue to lead homeownership demand,” said Odeta Kushi, deputy chief economist at First American Financial Corp.

Second, mortgage interest rates have been falling again the past few weeks, and low rates also continue to drive vigorous home-buying demand. Third, May’s data shows that the U.S. real estate market is also still being driven in part by reactions to the pandemic, as many buyers move from urban apartments to suburban houses. Northbrook & North Shore home buyers have been predominantly from the city of Chicago who sought more space for better prices in the suburbs, with access to a variety of greenspaces & outdoor amenities.

In the home building sphere, many builders are capping sales to manage their costs and make sure they don’t sell more homes than they can build as high demand persists.

If you’re interested in knowing your home’s value in the present market based on recent North Shore sales, enter your address here to find out what your home is worth right now.

If you have any questions about our market or are thinking about buying or selling, don’t hesitate to call us at 847-379-8813 or email us at [email protected]. We’re out in the market every day helping clients to buy and sell, and we do research so we have the best advice to give you, no matter your situation. www.spaniakteam.com

We look forward to hearing from you.

This post is an advertorial piece contributed by a Patch Community Partner, a local brand partner. To learn more, click here.