It's an old question, here in Chicago and across the U.S. "When does the Real Estate Market heat up again after its usual seasonal slowdown between Halloween and the New Year?
The old salt suggests the market begins to thaw in the springtime. Here in Chicago, that is usually when average daily temperatures reach the freezing mark or above. This time of the year, we Chicagoans consider 32 degrees quite mild, you know!
Backing the onset of nice weather by adding a normal 45-day home closing processing and approval schedule, you roughly reach into to early February - around the time of that Big Football Game. In our Team's experience, however, things start to rekindle way before that around Chicago.
True, in November and December, many potential homebuyers and homesellers minds turn to making turkeys, or hams. Buying holiday presents, and baking. Cranberry Sauce, Egg Nog, then Champagne.
We have found, however, that the Chicago market starts to stir right after the New Year - in early January - and builds to full-steam interest about six weeks later, in mid-February.
Why?
Perhaps it's cabin fever, fueled by that New Year's Resolution, "Honey, we've gotta have a bigger house this year!"
Our Real Estate Team has already listed the homes of three seller clients formerly waiting until the holidays were though. We have four buyer clients in tow, showing them houses this coming weekend. That's an optimistic start to 2010 - stronger, it appears, than it was one year ago, last January.
Buyers in January, when weather is cold and snowy, and sellers wanting for interest in their homes, often find sellers are more likely to strike a buyer-attractive bargain this time of the year. That's not always a license to steal, but it often gives winter home buyers a bit of an edge over those who wait until more buyers break out of hibernation when the weather in Chicago starts to warm, ever so slightly.
Sellers? They find less competition when the weather is wintry. Only serious buyers trudge through snow and freezing cold to look for a home this time of the year. Importantly, there is less competition than there will be in the spring, perhaps less pressure downward on pricing due to supply and demand factors.
But, sellers, remember - this is 2010, not 2006! The Chicago Real Estate Market remains sluggish, especially for condominiums. Mortgage approval requirements have become far more stringent, and some buyers are still waiting for prices to drop even further. These buyers read the papers and surf the Internet, and pause at every story suggesting continued market sluggishness, rising foreclosures, and likely price declines.
As it always has been, buying and selling a home has little to do with what is being asked by the seller, or offered by the buyer. It is all about what the market will bear. These days, the bearable price is considerably lower than it has been in past Januarys.
Pricing this time of the year, even more importantly than after the weather warms, involves a strategy of reviewing comparable property data on sold and active properties, studying sell-to-list-price ratios, and the average time on market for those properties already closed or pending sale. Real Estate Practitioners can examine the detailed listing history of any property sold or for sale, to uncover the trigger that generated an offer or a closed sale.
Another key factor will be the seller's motivation - why must they sell? An examination of the seller's Property Tax Records, available to Realtors through the MLS, can help determine how much equity the seller has - or if he is underwater, possible ripe for short sale or foreclosure. Here in the Chicago Area, the property must carry a "Short Sale" flag on the MLS if the seller is upside-down, and time-consuming bank approval is required.
Chicago Tribune Real Estate Columnist Mary Umberger discusses Prime Selling Season in more detail in her column from last Sunday's Trib.
But if your looking to buy a new home, or looking to sell - here in Chicago, there is no time like the present. Be the early bird in 2010!
Please read our post today via BlogChicagoHomes.com.
DEAN & DEAN'S TEAM CHICAGO
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