What the Chicago Association of Realtors Says 2023 Holds
What can you expect from 2023? We gathered our top takeaways from the event to help you get a jump start on the year.
Are We Headed Towards a Housing Crash? Not Likely.
There are lots of media headlines about whether or not we’re heading towards a housing crash similar to the one we experienced in 2008. Looking at the state of the current economy, Dr. Yun suggested that a housing crash will likely not occur.
Currently, we are seeing more jobs in the economy, fewer subprime loans and less inventory in comparison to the state of the market in 2008. The two most important indicators — subprime lending and inventory — are both decreasing, signifying how different this market is compared to 2008, when both were high.
Mortgage Rates Will Likely Even Out.
The future of mortgage rates is dependent on inflation, but we expect to see it start to even out, Dr. Yun said. Mortgage rates hit a peak in November 2022 and have been declining ever since. If inflation continues to decrease, we can expect mortgage rates to continue to do the same.
Be cognizant of timeframe — don’t expect this to be a sharp decline. Dr. Yun suggested that it could take at least 18 months for inflation to reach its normal rate of 2%.
Rent Prices Are Expected to Grow in Chicago.
Before the COVID-19 pandemic, the rental growth five year average was 2%. In 2023, Stephen said that we are expecting that growth to double to 4%, putting it towards the top of the nation’s cities with the highest forecasted rental increases this year.
When comparing year to year, North DuPage County had the highest rental growths in 2022, increasing 10% from the year previous. On the other hand, South Lake County in Indiana had the lowest rental growths in 2022, decreasing -1.6% compared to last year.