This has been a spring unlike any other. The COVID-19 pandemic has thrown us off the rhythm of our lives and impacted the economy in countless ways. But life continues to move forward, and that includes people who want to sell and buy a home. While it would be naive to say that coronavirus hasn’t affected the Chicago housing market, many truisms about the best time to buy a house remain the same.
Spring and Summer: More Options, More Competition
Generally, spring and summer provide greater options for home buyers. Many sellers wait until after winter’s cold temperatures and harsh conditions pass before listing their homes for sale. But while there may be more homes to choose from, there also tend to be more prospective buyers in the hunt for those homes as well. Not only does the warmer weather attract an increased number of purchasers, but spring and summer are good times to buy a house for parents with school-aged children.
All of those buyers out there means that the market can become much more competitive. This can lead to higher listing prices and bidding wars. But this year, COVID-19 has changed the calculus a bit, as many folks on both sides of the table seem to be taking a wait-and-see attitude. For example, as of March, new condo listings in Chicago are down 22.5% compared to the previous year, leaving fewer options than usual.
The corollary is that a lot of buyers are also putting the brakes on their plans. According to a survey by Homelight, 52% of top agents have reported buyers putting their searches on hold due to the pandemic, while 22% of survey respondents have seen sellers take their homes off the market specifically because of COVID-19.
Given the foregoing, are spring and summer still a good time to buy a house in Chicago? The corresponding declines in listings and buyers mean that the fundamentals of the seasons remain the same: a smaller, but still robust, market.
Fall/Winter: Motivation Rises, Prices Drop
Since more listings come online in spring and summer, houses that remain on the market in the fall and winter tend to have been listed for a longer time. That means prices for those extended listing often drop as sellers become more impatient about getting things done. And with fewer buyers in play in these colder months, sellers may be more inclined to negotiate when requested by an interested buyer.
With so much uncertainty about the course and duration of the pandemic, it is difficult to know what the housing market – and the world at large – will look like several months from now. Even at present, social distancing and shelter-in-place orders can make it seem like now is not the best time to buy a home. But as Albert Einstein once said, “In the midst of every crisis, lies great opportunity.” Current conditions, as unprecedented as they are, still provide plenty of excellent opportunities for Chicago home buyers. It’s important to speak with an experienced real estate team who can provide further guidance about buying during these unusual times.
Chicago’s Real Estate Market and COVID-19
Although low inventory is helping live listing garner multiple offers, those are likely the same homes that attracted multiple buyers pre-coronavirus anyway. And, as usual, the stale listings that lack updates and/or are overpriced are sitting far past the median market time for the neighborhood. In some ways, the market is behaving as it always has, just on a much smaller scale.
Don’t assume that because of the lockdowns you can come in far below market value, either. Some sellers may be more negotiable than others solely based on their own personal situation and how its been impacted by the citywide and national economic decline. Others, not so much.