Real Estate Corner

Real Estate Trends in Kendall County!

The Real Estate market in Kendall County, throughout Illinois, and the rest of the nation has changed in the last 12-18 months. The Real Estate market from 2003 to 2005 and even into the mid 2006 was extremely aggressive and became somewhat overvalued. As most of you know, investments never go up or down forever. It was time for a market correction and it started to creep into our economy approximately around August of 2005 about the same time the oil prices started to spike.

The 2005 Real Estate year still finished on a very strong note. The 2006 year was somewhat sluggish but still had near record sales growth.

However the 2006 Real Estate year started with some major corrections in the housing market prices. There started to be an over abundance of inventory for residential properties especially in Kendall County due to its accelerated growth rate. According to City building departments, Headrick – Wagner Appraisal Group, there is approximately 12.2 months of housing supply in Yorkville, 7.5 months of housing supply in Oswego, and Sugar Grove, close to Kendall County, has a 13.1 months supply of housing. A normal, healthy housing supply is approximately 4 months. Once you exceed the 4 month supply baseline, the market starts to lean toward the buyers’ behalf.

According to the Illinois Association of Realtors 1^st. Qtr. 2007 housing market report compiled data, shows that total home sales throughout Illinois ( which includes single-family homes and condos) were down 14.2% from home sales in the 1^st. Qtr. 2006. However the first quarter median home sale price rose 0.5% from $196,000 in 2006 to $197,000 in the 1^st. Qtr. 2007. With such a significant sales drop, this interprets into a scenario where the sellers have to be more realistic on pricing their homes in order to compete in the marketplace. Most likely sellers will not get 2003 – 2005 prices for their homes today.

The current mortgage interest rates still are very favorable and have been for the last few years. As of June 7, 2007, the 30 year fixed rate for a mortgage was approximately 6.75%. This is an extremely favorable rate and will continue to keep buyers in the market shopping for homes in our Kendall County area. Lenders are still aggressive to make loans to buyers. They also have many mortgage programs that can be custom tailored to accommodate your own personal situation. Before a buyer starts to look for homes, make sure you have contacted a lender and have received a mortgage loan preapproval letter. This will determine how much you can afford when purchasing a home. It will also strengthen your offer when you are negotiating a sales contract.

A lot of developers/builders who optioned or contracted for large parcels of land in the Kendall County and Fox Valley Area for housing development have recently relinquished their contracts with the seller and pulled their horns in due to the high inventory of homes on the market. It has become too risky for developers to be paying top dollar for land and having to sit with it until the market seeks its own level where demand and supply become more compatible. The market price is just like water. It will always seek its own level.

FYI: When working with a Realtor, your Realtor will do a detailed comparative market analysis on your property. Make sure you price your home within the parameters that the comparative market analysis has displayed to you. If you over price your home, you run a strong chance of your home sitting on the market for a very long time. This could ultimately result in receiving lower offers than you anticipated or not getting any offers at all. Buyers today are being represented by a buyer’s agent whose job is to procure a home for their client for the best price and terms possible. The buyer’s agent and your agent are most likely using the same housing database disseminated by the Multiple Listing System. So price your home in line with your competition and your home should sell within a reasonable length of time.