11 Facts You Should Know about Today’s Illinois Real Estate Markets

Think locally and long-term and do your homework.

1. Best buying opportunity in years! 

If you’ve been thinking about buying a home, your timing couldn’t be better. With current inventory levels and prices stabilizing, plus historically low interest rates and the homebuyer tax credit, you have an unprecedented buying opportunity.

2. Housing remains an excellent long-term investment.

Owning a home is how many families begin to accumulate wealth. Given the leverage you get in purchasing a home, the average return on a 5% down payment over 10 years is usually three to five times greater than stock market returns. And you can’t live in a stock! In Illinois the median price in 2008 was 23% higher than it was 10 years earlier in 1998.

3. The Illinois market is cushioned from extreme highs and lows. 

Our Midwest market did not experience the extreme increases (and declines) in home sales and prices during the real estate boom as did housing markets in California, Florida and the Southwest. In 2009, Illinois single- family home prices trended back to pre-boom levels (before 2001); condos back to 2004 levels. 

4. Affordable, safe mortgages are available even for people with less-than-perfect credit. 

A mortgage backed by the Federal Housing Administration (www.HUD.gov) can be the ­answer for first-time buyers who have a hard time getting financing and enough money for the down payment. Also, the Illinois Housing Development Authority (IHDA.org) offers ­Illinois residents special loan programs. 

5. Interest rates have one way to go—UP! 

Mortgage rates reached 50-year lows in 2009. This is an ideal time for buyers to save thousands of dollars by obtaining home ­financing at record-low rates. 

6. NEW! Tax credit for long-time homeowners.

Long-time homeowners who buy a new principal residence by April 30, 2010, may qualify for a tax credit equal to 10 percent of the purchase price up to $6,500 (or $3,250 for a married individual ­filing ­separately). According to the IRS, the long-time homeowner must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.

7. First-time buyers, hurry to get the $8,000 tax credit. 

More first-time buyers are out in force taking advantage of the affordable entry-level home prices and the ­federal first-time homebuyer tax credit equal to 10 percent of the cost of the home up to $8,000. Eligible taxpayers must buy, or enter into a binding ­contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. If the credit is more than the taxes owed in 2009 or 2010, the buyer will get a refund check for the difference!

8. It pays to own versus rent. 

A typical homeowner’s net worth is 49 times that of a renter’s, according to the National Association of ­REALTORS® estimates using the latest figures from the Federal Reserve Board’s Survey of Consumer Finances. Owning a home provides both equity and tax benefits over time, plus important social benefits such as shelter, security and independence.

9. Getting help from an Illinois REALTOR® is a smart financial decision. 

It has never been more important than now to work with a REALTOR®, the local market professional, to properly gauge local neighborhood conditions. Some markets have two levels of pricing—distressed sales and traditional sales. REALTORS® can help both buyers and sellers navigate today’s complex market conditions.

10. Sellers can recoup on the buy side.  

To sell quickly in today’s market make sure your home carries a compelling price, not just a comparable one. The low interest rates and price declines in today’s market give trade-up buyers a unique opportunity. What a seller may lose on the sell side can be more than recovered on the buy side.

11. Current market conditions won’t last long. 

In Illinois sales volumes are on the rebound. As sales ­increase, ­inventory levels will decrease and prices will begin to rise. Buy now for the long-term while you have the buyer advantage.