Did You Know – Buyer’s Market

1. Did you know that it’s a buyer’s market? 🤯

In most suburbs of Chicago, and even most spots in the city of Chicago, it’s currently a buyer’s market! Post 2008 recession, (2011-2014/2015) the real estate market was a seller’s market. This meant, multiple offers on properties, lots of showings, increasing prices, low market time, and low inventory. In the past few years (2015-2018) I’ve been using the word “fair” to describe the state of the market. This meant that there was not a clear advantage towards sellers nor buyers. Homes selling at a premium price also had premium features, whether its size, cosmetics, location, etc. And homes selling below market value needed a lot of work and/or expensive updates. The condition of the property determined the price, not so much the supply and demand.

Since the end of 2018 the market has slowly (I guess you could say quickly) become a buyer’s market. We’re seeing a little bit of a correction everywhere. Homes are not selling at the prices they would have sold for a year ago. There are not as many buyers, furthermore not as much urgency amongst them. Everything is being taken down a notch or two.

Sellers – You may be better off waiting until early spring or even a couple years. But if you need to sell now, then be as aggressive with your price as possible so that you can get in front of the market correction, and not chase it downward.

Buyers – Get in the game and take advantage of the price drops 👍

You can see all “did you knows” with #gattonerealestatedidyouknow

Joe Gattone | Berkshire Hathaway | 847.650.4048

#didyouknow #libertyville #lakebluff #lakeforest #lakeforestil #lakeforestillinois #vernonhills #mundelein #grayslake #gurnee #antioch #wauconda #lakezurich #barrington #palatine #arlingtonheights #buffalogrove #longgrove #lincolnshire #deerfield #northbrook #glencoe #glenview #winnetka #northfield #wilmette #highlandpark #besmartaboutyourrealestate #gattonerealestate

2. Did you know mortgage rates are at a 3 yr low?! 🤯

The average mortgage rates this week were 3.49% on 30 yr mortgages, and 3% for 15yr mortgages. I’m pretty sure 3 years ago was a historic low, which means that we’re at historically low rates, again! 🙌

Over the past 3 years as rates increased from low 3%’s into the high-4%’s and low-5%’s…Buyer’s had their buying power reduced. These higher rates increase your monthly payment, reducing the amount you’re able to purchase. Every 0.25% increase will cost you an additional $10/mo per every $100k borrowed.

However, now that rates have dropped, buyers can increase their purchase limits without seeing a change in their monthly payment. A $300k loan at 4.5% last year vs 3.5% now (a full 1% decrease) is saving you over $150/month. $150/mo = ~ $30k in purchase price.
👀 Every $50/mo equates to $10,000 in purchase price 👀

This means buyers’ Max purchase price just increased about 10% without having to pay more per month. This could allow some buyers to make a jump into a property with a better school district, more square footage, better updates, etc. that wouldn’t have been attainable 6 months ago.

Sellers – Hope that buyers become aware of this change so that they start feeling more comfortable paying a little more in purchase price. 🙏

Buyers – Take advantage of the low interest rates to lock yourselves into a much more affordable payment for a long term purchase, and/or increase the budget for the purchase price with the monthly money you’re saving on the interest rate and get that house you couldn’t get before. 👍

You can see all “did you knows” with #gattonerealestatedidyouknow

Joe Gattone | Berkshire Hathaway | 847.650.4048
#didyouknow #libertyville #lakebluff #lakeforest #lakeforestil #lakeforestillinois #vernonhills #mundelein #grayslake #gurnee #antioch #wauconda #lakezurich #barrington #palatine #arlingtonheights #buffalogrove #longgrove #lincolnshire #deerfield #northbrook #glencoe #glenview #winnetka #northfield #wilmette #highlandpark #besmartaboutyourrealestate #gattonerealestate

3. Did you know that housing inventory is up!? 🤯

Depending on where you look, both in the suburbs AND the city, most markets have seen a 10%-25% increase in inventory. This means there’s a lot of homes on the market. Not only are rates low, allowing you to afford more house with your money, but there’s also a lot to choose from! This is a supply and demand nightmare for sellers 😬 but a huge opportunity for buyers. High supply (and low demand over winter time) translates into great prices. 👍

However! The list price will not always reflect this! You’ll need an agent you can trust to leverage this knowledge/data to help you negotiate the prices down 😉

Sometimes during the fall and winter months we see a decrease in demand that results in better prices, but sometimes the supply isn’t there and buyers are stuck with less desirable “leftover” homes from the spring/summer market. But we have a lot of houses for sale right now! So not only can we get a great price, but you’ll be able to sift through several options and get your pick of the litter too!

Buyers – Get. In. The. Game. Don’t pay the same price as the comps. 👊

Sellers – Don’t be on the market if you don’t NEED to sell. And price yourself competitively if you do NEED to sell. 🙏

You can see all “did you knows” with #gattonerealestatedidyouknow

Joe Gattone | Berkshire Hathaway | 847.650.4048

#didyouknow#libertyville#lakebluff#lakeforest#lakeforestil#lakeforestillinois#vernonhills#mundelein#grayslake#gurnee#antioch#wauconda#lakezurich#barrington#palatine#arlingtonheights#buffalogrove#longgrove#lincolnshire#deerfield#northbrook#glencoe#glenview#winnetka#northfield#wilmette#highlandpark#besmartaboutyourrealestate#gattonerealestate

4. Did you know you can add renovation money to your mortgage?!🤯

This can be beneficial for buyers that can afford a little more per month, but don’t have the liquid cash to pay for an expensive renovation. Typically updated homes are the first to sell, and sell for a premium price (even in a buyer’s market). This can help you gain instant equity!

There are lots of details and extra steps that come along with these types of loans, BUT! All the and hoops that you’ll have to jump through will be worth it. The cost of every additional $10k above the the purchase price is roughly an additional $50/mo, so on the cash flow situation, you’ll win. The only negative is if you end up paying interest for a long period of time; however, rates are so low right now (see my other Did You Know) and the cost of buying and renovating yourself is always cheaper than buying a home that has already been renovated – you should have instant equity and be able to make the money back when you sell. 👍

The only catch is that some of these loans require pretty good credit and debt:income ratios. Working with a phenomenal lender (and me of course 😉) will help with understanding all the details, which type of renovation loan is the right fit, and guidance through all the steps.

Buyers – IMO this is a good strategy both short and long term. Almost a no-brainer if you don’t have cash. Even if you do have cash, money is soooo cheap right now that you may consider borrowing and keep your savings more liquid. 💰💰

Sellers – You have these same options in the form of refinancing. This may help you get some of updates completed that can help you sell for more and be competitive in a buyer’s market. 💱

You can see all “did you knows” with #gattonerealestatedidyouknow

Joe Gattone | Berkshire Hathaway | 847.650.4048

#didyouknow#libertyville#lakebluff#lakeforest#lakeforestil#lakeforestillinois#vernonhills#mundelein#grayslake#gurnee#antioch#wauconda#lakezurich#barrington#palatine#arlingtonheights#buffalogrove#longgrove#lincolnshire#deerfield#northbrook#glencoe#glenview#winnetka#northfield#wilmette#highlandpark#besmartaboutyourrealestate#gattonerealestate

5. Did you know that in IL, Sellers pay the commission?🤯

This means that you can use the services of a real estate agent to help you buy a home, and you don’t have to pay them! The listing brokerage is offering commission to buyers’ agents to bring their buyers through. From my point of view, representing a buyer, I don’t care which house you decide on or how many homes we need to see… So long as you stick with me when you DO pick one, I’ll get paid by the listing brokerage at closing. Using a real estate agent on the buy-side is a no brainer! I search/fight/negotiate on your behalf, and get paid by Not You. #notyou 💵
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Buyers – If you’re trying to buy a home on your own or you are casually searching on your own, please reach out! I’m happy to help you search and send you properties that are not currently on the market as well. Not to mention helping you understand every step of the process from search to closing table – at no cost to you! 🍧
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Sellers – Unfortunately, this is just the way it works. Be sure to discuss the commission and costs with your agent so that there is no confusion, and also be sure to know what you can expect from your agent for the money you’ll be paying them.
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You can see all “did you knows” with #gattonerealestatedidyouknow
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Joe Gattone | Berkshire Hathaway | 847.650.4048
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#didyouknow #libertyville #lakebluff #lakeforest #lakeforestil #lakeforestillinois #vernonhills #mundelein #grayslake #gurnee #antioch #wauconda #lakezurich #barrington #palatine #arlingtonheights #buffalogrove #longgrove #lincolnshire #deerfield #northbrook #glencoe #glenview #winnetka #northfield #wilmette #highlandpark #besmartaboutyourrealestate #gattonerealestate

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