8 Reasons to be Optimistic About Housing

– Dick Greenwood, Director, Builder Marketing

“It’s just arithmetic” as Mark Zandi, Moody’s chief economist likes to say:

Dick Greenwood

  1. At about 3.5%, the 30-year fixed rate mortgage is at its lowest point in two generations.
  2. Tight inventory and multi-bidding have led to shorter days on the market. In many markets, including Chicago, a home fairly priced sells within a week with multiple offers.
  3. Illinois home sales increased in the 1st quarter of 2013 over previous year levels and prices have also increased as much as 9% in many Chicago markets.
  4. The dollar volume of mortgage lending, while still depressed compared to historical averages is increasing steadily. Banks are again making mortgages.
  5. According to Tracy Cross Research, new home sales for Chicagoland were up 18.2% in 2012 over 2011.
  6. CoStar Group which provides real estate information, reports that land sales began rising in the last quarter of 2012 for the first time in seven years.
  7. 2013 will be the fourth year in a row that the economy will add some jobs. Although it may take years to get back to full employment, this is movement in a positive direction. Job growth drives housing demand and starts.
  8. Housing values, after spiking at unrealistic levels between 2004 and 2008, are back to normal values. Economists say housing now is fairly valued, not over or under valued.

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