Chicago’s real estate inventory is low, with less than 6 months worth of inventory. Well maintained homes that show perfectly and are priced at the market are selling in weeks. A lot of homes (discounted and not discounted) have sold this year. This is reflected by the increase in sales volume across Chicago’s north side, and prices are showing signs of stabilizing. These are positive signs of improvement, but we are not totally out of the woods yet. At the end of June, 111 leading financial analysts are predicting a further drop of .4% before the end of the year, and it’s expected that Chicago and Illinois will have another wave of distressed/discounted property come into inventory – especially after the election.
Election years can be tough on growth because of the uncertainty of which party and who will next be in office, but the following year is better. On a national level, we can expect modest increases as part of this recovery which indicates that things are starting to turn the corner. By the end of 2013, we can expect a gain of 1.3 which when you take away the .4 drop leaves a 1% gain. To put this into the context of the question whether to sell or hold, let’s take a look at some numbers. If your home’s present value is $300,000, you’d have an increase of $3,000 by the end of 2013. If your home’s value is $500,000, then it would be about $505,000 by the end of 2013.
Whether you stay put or decide to rent out our home, there are other factors to consider: your home will 1 year older – may require decorating and updating, taxes may go up (no longer eligible for homeowner exemption), routine and/or emergency maintenance and how many other people are waiting to do sell – will you have more competition? If you become a landlord, consider that the tenants will likely not keep your home as nicely as you did and your home will not show as well as it did when you lived there – especially if it’s vacant. If you bought near the bubble and haven’t paid down much of the principal on the loan, the other important factor to weigh is whether you will be better able to absorb the loss that will come with selling. Will you be able to save more than you stand to gain by waiting?