How Chicago homebuyers can score deals this winter
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It was a bad year to be a buyer, but the tail end of 2023 might offer some bright spots for Chicago house hunters.
Why it matters: Home shoppers are desperate for even a little more buying power.
- There's less competition among buyers now — thanks to still-high mortgage rates and the typical holiday season demand dip — which leaves room to find better deals.
By the numbers: Chicagoland home prices keep climbing, up nearly 6% in October compared to last year, per the latest Illinois Realtors data.
- Roughly 39% of Chicago metro-area homes sold above asking that month, compared to about 32% nationally, according to Redfin data.
Yes, but: Buyers can score deals on Near North Side and South Loop condos, where there's more high-rise inventory, Chicago broker Mary Jo Nathan tells Axios.
- For a single-family home, consider an outlying neighborhood: "If you wanted to buy a brick bungalow, you could find something in Portage Park" or nearby, Nathan says.
- "They exist out there, and you get good value for the money."
Zoom out: More than one in three U.S. sellers gave concessions to buyers August-October 2023, according to a new Redfin report.
What's happening: Most sellers — sitting on record-low mortgage rates — are only moving if they have to. Desperate to close the deal, they might throw in cash for repairs, closing costs or mortgage rate buydowns.
- Some sellers will pay cash toward a temporary lower mortgage rate for the buyer, instead of reducing the asking price, mortgage lender Donny Kirby tells Axios.
- It helps make "the payment palatable in the first couple of years," and most buyers are betting they can refinance later, he says.
What we're watching: After peaking above 8%, mortgage rates have fallen closer to 7% over the last month.
- A one percentage point drop in mortgage rates doesn't have a huge impact on a new homebuyer's monthly payment. But even a slight dip was enough to get some buyers off the sidelines.
State of play: A $400,000 home costs nearly $1,000 more per month than it did two years ago — in principal and interest alone.
Go deeper: How to interpret mortgage rates you see in headlines