Monday, August 20, 2012

House Prices: Window of Opportunity Beginning to Close

There have been conflicting opinions as to where housing prices are headed. We want to give our opinion on this subject for the short term. We believe Evanston sellers have a window of opportunity for the next 90-120 days in which to sell their homes for maximum price. We believe there will be increased downward pressure on Evanston home prices throughout the rest of the year.

Why renewed downward pressure?
Any item’s price is determined by ‘supply and demand’.  In Evanston, existing housing inventory has dropped to historic norms in the last few months. However, an inventory of distressed properties, (foreclosures and short sales), have been coming to the Evanston market this year and will increase going into 2013. This inventory has been delayed for over a year as the Federal and state governments crafted an agreement with the five largest banks and mortgage servicers to establish a roadmap for how a foreclosure must be properly completed. That agreement, the National Mortgage Settlement, was earlier this year.

What Impact Will the Agreement Have on Foreclosures?
Brandon Moore, chief executive of RealtyTrac, explains:
“The settlement sets forth clear guidelines for lenders and servicers to follow when foreclosing, which should allow them to push through some of the delayed foreclosures from last year.”

How Many Foreclosures Could We Be Talking About?
Mark Vitner, a senior economist at Wells Fargo Securities tells us:
“The settlement helps the housing market in the long run because it allows banks to proceed with millions of foreclosures that have been stalled.”

What will this mean to Evanston home prices?
Distresses properties such as foreclosures and short sales are currently at 7% of the total Evanston market. As more of this inventory comes to market, it will impact Evanston home prices in two ways:
   1. It will bring to market discounted competition for buyers
   2. It will impact the appraisal values of all homes in the area

Bottom Line
There is a window of opportunity currently which Evanston sellers should take advantage of. Waiting until later this year will not guarantee a higher sales price. If anything, in many areas, it probably guarantees the exact opposite.

Selling your Evanston home can seem like a daunting process, but we’re here to answer any questions you have about selling your home. Your home selling experience should be one that leaves you feeling satisfied. Be sure to contact us today so we can put our expertise in the Evanston Real Estate market to work for you!
*Information taken from the KCM Blog

The Thomas Team

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Chicago & North Shore Real Estate
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