Justin Gwizdala, 33, recently bought his third home. He and his wife were waiting for mortgage rates to drop and a suitable home to come on the market so they could move closer to family and friends in the northeastern suburb of Lake Forest.
The father-of-three last bought a home in 2021, buying a five-bedroom house in Hawthorn Woods with a 3% mortgage rate.
Mortgage rates have since skyrocketed, but Gwizdala said he was pleasantly “shocked” to have been able to keep his mortgage rate below 6% on his most recent home purchase. The mortgage rate on his new five-bedroom home in Lake Forest is 5.625 percent, meaning his monthly payments will be about $4,900, including taxes and insurance. My monthly payments on my previous home were about $4,000.
“When you look at the drop in interest rates from six months ago…it’s a tremendous difference in monthly dollars,” said Gwizdala, who saves a few hundred dollars a month.
Gwizdala entered the market as interest rates began to fall, but uncertainty remains around mortgage rates, upcoming elections and new written agreements required between homebuyers and real estate agents. Many buyers and sellers are still holding out. The National Association of Realtors settled the case, according to local real estate agents and market experts. And as long as the stubborn shortage of homes for sale, which has plagued local and national real estate markets for more than a year, affordability challenges will remain for potential buyers in Chicago.
Gwizdala moved the deal quickly, closing about 48 hours after the Lake Forest home went on the market, knowing the seller had other interested buyers. .
Gwizdala had more than 15 families view the homes he sold, and received three offers about six days after the homes went on the market. Gwizdala listed the property for $875,000 and received two offers above the listing price, but chose to accept the asking price offer. The buyers offered more flexibility in terms of when she could close on the home and how long Gwizdala’s family could stay in the home, giving her more cash and more time to move. he said.
Overall, Gwizdala said she was happy that both the purchase and sale processes were completed for her family and took only two and a half weeks.
“I feel like it worked out perfectly for us,” Gwizdala said. “There’s not a lot of inventory…and there’s definitely a demand for good housing.”
The process of buying and selling a home is changing. Here’s what you need to know about Illinois.
Darryl Fairweather, Redfin’s chief economist, said a limited inventory of homes for sale in the Chicago area is pushing home prices above national levels. Home prices in the Chicago area rose 9.4% in September compared to the same period last year, while nationally they rose 3.9%, according to Redfin data. Home sales in the Chicago area were down 9.2% in September compared to the same month last year, while nationally they were down 4.8%. New home listings in Chicago were down 7% in August, according to Fairweather, compared to a 2% increase nationally compared to the same month a year ago, according to Redfin data. Although the number of newly built residential properties increased slightly compared to the same month last year, the decline in the number of properties nationwide was said to be minimal.
“My interpretation is that people who own homes in the Chicago area aren’t keen on selling their homes,” Fairweather said. “And there are more people looking to buy homes than sell them, which puts additional pressure on prices. …Meanwhile, other parts of the country have a little more headroom in the market. There’s not a lot of demand.”
The median home sale price in the city area and Chicago metropolitan area was $350,000 in September, down slightly from $355,000 in August, according to data from Illinois Realtors, a trade group for real estate agents. did. The statewide median sales price in September was $290,000, down slightly from August’s $295,000. Median sales prices rose more than 7% year over year across the city, metropolitan area and state in September, according to data from the Illinois Realtors.
Homeowner Justin Gwizdala stands outside his home in Hawthorn Woods on October 15, 2024. (Ryan Rayburn/Chicago Tribune)
According to data from the National Association of Realtors, the national median sales price for existing homes (excluding new homes) was $404,500, marking the 15th consecutive month of year-over-year increases. The inventory of condominiums in September increased from August, both locally and nationally, according to data from Illinois Realtors and NAR.
The average 30-year fixed-rate mortgage began its downward trend in May, with an even steeper drop from July to September, according to Freddie Mac data. The average interest rate reached its lowest level in two years at 6.08% in the last week of September.
As workers return to offices, residents return to Chicago and other cities, and home prices are rising.
Erika Villegas, president of the Chicago Association of Realtors, said she saw some buyers re-engage toward the end of September as mortgage rates continued to decline, but persistent inventory and affordability challenges remain. He said there are prospective buyers who are struggling. She said many families also typically tend to stay put while their children return to school.
Adam Stempel, 43, is one example of a prospective buyer who decided to put off the house hunt this summer.
Mr. Stempel and his wife bought a four-bedroom home in the western suburb of Villa Park in 2009, offering a higher-rated school and better representation of their age group for their two children. I am considering moving to the area where I live. Current mortgage interest rates are around 3%.
Kelly Stempel (from left), her daughter Erin (11), her husband Adam, and daughter Leighton (9) carve pumpkins in the Villa Park backyard on October 27, 2024. (Armando L. Sanchez/Chicago Tribune)
Earlier this year, they were looking at homes in various suburban areas, including Oak Brook, Clarendon Hills and Hinsdale. But a combination of factors, including high home prices and mortgage rates, dissatisfaction with the inventory of homes on the market, and the decision to send one of their children to private school, causes them to postpone their home search until next year. It happened. Stempel said. Mr. Stempel’s budget is at the upper end of $1.2 million, but he said that’s not possible and that he wants a home that matches his current space, with amenities such as an outdoor living area and a finished basement.
“It’s very difficult for us in the sense that we make a place our home and then when we go looking for the next place, we expect it to be a little better,” says Stempel, who works in the technology industry. he said. “And I don’t think there was any inventory in our price range that would make it any better.”
While some in the industry remain optimistic about the rest of the year, others are not.
@properties Crystal Tran, who leads a team of real estate agents at Christie’s International Real Estate and has been in the industry for more than 12 years, is seeing a trickle of more buyers and sellers as interest rates drop. He said he had seen it. People may sit tight until the election is over.
“I think the economy will really pick up again right after the election,” Tran said. “As interest rates continue to fall and continue to fall, people we contacted last year or two ago who wanted to buy but couldn’t find a home or couldn’t afford a home. They thought they might be able to afford the house because interest rates had come down a little.
But Redfin’s Fairweather isn’t so sure. She said there’s a lot of uncertainty for buyers and sellers with recent changes around real estate agent fees, climate-induced hurricanes and changes in mortgage rates.
“I don’t think it’s ever good for markets when there’s uncertainty,” Fairweather said. “I think some of the uncertainty will be resolved (after the election), but not all of it.”
ekane@chicagotribune.com
