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Leading or Leaving the Market

Lincoln Park during the winter.
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This past year has seen a very difficult market.  For many home sellers, competing against inventory, aggressively priced distressed sales proved to very challenging.  Even sellers who found buyers faced hardships of having their home appraise for contract price if there were not enough comparable resales in the area.

With the job markets slowly recovering, and as previous home owners look to slow repair their credit, many are finding their way into the rentals markets.  Many who have stayed with roommates or are no longer attracted into purchasing due to the expiration of the tax credit will also find their way back into the rental market.

Little by little, this will remove inventory, especially developer units who choose to rent out remaining units instead of selling in the current environment.

Depending on the continued job recovery and inflation, this will continue to affect rentals and housing, especially in the lower price tier.  Illinois recently added 70,000 jobs this year, and the three-month moving average decreased -0.2 point to 11.2 percent in May, its first decline since November 2006 (Illinois Dept of Employment Security, June 17, 2010).

Current low rates may not be attractive enough to compel renters to buy.  Rather, it will help stabilize the rental sector, creating a slow trickledown effect.  Owners of studios, one and smaller two bedroom condos may find renting their current home a more suitable option allowing them to purchase their next home.

Based on sales data from the Chicago Assoc of REALTORS®, median attached selling prices in the first quarter compared to the year before were up in several key areas, partly due to the influx of sales from the tax credit.

Loop: 20%
Woodlawn 27%
Bridgeport 34%
Edgewater 10%
Lake View 3%
Lincoln Park 1%
West Town 1%

Sherwin is a REALTOR® in the Chicago & Suburban area with @properties. Questions can be forwarded to Sherwin Sucaldito

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”Leading or Leaving the Market” by Sherwin Sucaldito is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.
Based on a work at RealtyEvolved.net

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