Summer 2020: Where is the real estate market?
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How is everyone doing? I really mean it, how are you? 2020 has been quite a year so far, and we’re only in Q2. One of the big buzz words of 2020 so far has been “uncertainty,” and I think that’s right. A lot of what has happened so far this year has been unprecedented, so where we go from here is unknown.
A big part of my job though is providing answers to my clients. What DO we know? I’ve spent the past several days sifting through the data and my own experiences over the past several months, and I have come up with some facts that we can hold onto.
The market overall
The market is surprisingly strong. According to Crain’s, the seven days leading up to May 11 showed a 2.9% increase in median home price over the same period of 2019. There are a few reasons for this uptick. First, inventory is down. Even before the pandemic inventory was down. When quarantine started, houses were pulled off the market, so our inventory continued to decline.
Couple that with the fact that quarantine started at the time that would normally be the height of our spring market, and you get a lot of pent up buyer demand. The real estate industry in Chicago also did a great job of making our listings virtually available to buyers, so they were able to do their homework. Now that things are beginning to reopen, there is a frenzy of activity.
The new homebuyer buyer
That said, buyers went through a transformation during quarantine. What they wanted and prioritized then versus now are drastically different. Here’s a quick list of what we see buyers looking for now:
Move-in ready: This was true before the pandemic, but it feels true for almost all buyers now. Buyers don’t want to parade tons of people through their home fixing, painting, remodeling. They want to move in and settle in.
More, flexible space: Rooms that can work in a variety of ways are essential now. A space that can convert into a classroom, kids hangout area, craft room, etc. Extra bonus rooms are on many buyers’ must have lists.
Outdoor space: People have learned that parks can close, so having their own outdoor space is a necessity for many buyers.
Community feel: People want to know their neighbors now more than ever.
What this all means for sellers
First and foremost, if you are thinking of selling your home, please call us! We have a long list of buyers ready to jump when they find the right property. For many, it is more important than ever for this to be a fast process, which means making sure your listing is ready for the market and then promoting your listing as much as possible. To make their home as appealing as possible, sellers should:
Take care of all the projects: As mentioned above, buyers want move-in ready. Take care of all the repairs that may catch a buyer’s eye. Your home should feel fresh and well-care for.
Greenery! Show off your home’s outdoor space with as much greenery as possible. Add potted plants and small trees to make the area feel lush, private and natural.
Stop worrying about entertaining: Entertaining has been replaced with flexible spaces in buyer’s minds. Showcase your kitchen as a great place to cook meals, and your bonus room as the perfect homework area.
What about pricing?
Pricing is harder than ever before for several reasons. First, it truly is a case by case, neighborhood by neighborhood calculation. Some homes and neighborhoods intrinsically meet what new buyers are looking for, and some don’t as well. It is also very difficult to use comparables right now. Homes that went on the market during the quarantine are not good comps. Homes that went on the market before the quarantine are not good comps. It’s more than ever to have a finger on the pulse of the market since things change so quickly.
I anticipate the next few months to be a strong summer market whether you’re buying or selling, so if you are thinking about buying or selling, don’t wait to take action!
