Many in the industry predicted the housing market would fully recover by 2014. Do you think the market will recover this soon? Why or why not?
I agree with that statement, but I think the market will recover quicker than 2014. In the market around here, we’ve already seen recovery. Typically during this time, it’s slow, but here, it’s busy, and there will be quite a few closings in January and February in all price ranges, not just low or just high-end. In addition, we’re seeing sellers pricing their homes according to what the market says, nothing over or underpriced, and those homes aren’t sitting on market for 120-plus days. I think 2013 will be a year to reeducate buyers because it won’t be a buyer’s market anymore, with no more ‘steals.’ I think next year’s spring market will be interesting; with people getting homes ready now for the spring market, I think inventory will increase – part of the problem now is inventory is down. I think for the next few years, we’ll have slow increases of 1 percent or so, and we’ll see prices go back to a level we saw around ‘06, right before the bubble.”
Liz Anderson, Century 21 Kreuser and Seiler
As far as pricing is concerned, the Midwest was the last to crash, so it stands to reason we’ll be the last to recover, but most people are looking actively for houses, and most people want to jump in and buy, including tons of investors. I’m seeing fewer foreclosures and more short sales, so I think lenders are getting the idea to keep people in their homes and trying to do more short sales and work with homeowners.
Prior to the housing surge of ‘05/’06, up to that point, markets were gaining 3 percent in appreciation, so I would say if we reach 3 percent gains in home values in the next two years, that’s a recovery. I would say we’d be pushing it pretty hard to get there by 2014; I’d say it’s more likely for that to happen in 2015/2016.”
Neil Piket, John Greene Realtor
I expect recovery in the traditional housing market by 2014; already we’re seeing multiple offers in some areas, and sales volume and prices beginning to stabilize. The distressed market is another story, and htat has much to do with the high unemployment rate in Illinois and our state’s judicial system’s approach to foreclosure. Illinois is currently No. 1 in the U.S. for its percentage of mortgage defaulters and we’re even seeing instances of re-defaulters. Re-defaulting can be due to a new job that didn’t work out. But too often, it’s because people are trying various ways to avoid foreclosure that don’t get them to the root of their real problem. Our judicial system allows a seven-month redemption period before people lose their homes, which can encourage people to try solutions that aren’t right for them. We’re trending in the right direction but have a way to go. Realtors can play a significant role by helping increase our emphasis on distressed homeowner education.”
Marki Lemons Ryhal, Keller Williams Preferred Realty
I don’t know if I can accurately predict a date when markets will fully recover, but I’ll say two things: one, if you’re looking at a recovery in terms of price recovery, where the prices will be back at what they were at their peaks in 2007 and 2006, I don’t see a realistic chance of that happening by 2014. I think we’ve got a long way to go for prices to stabilize and start having consistent year-over-year price increases. The single-family market in Cook County, for instance, is down 38 percent from the peak, so I don’t really see us getting back to that point by 2014.
If we’re talking about a normally functioning housing market, where you can have access to credit, or a buyer who personally wants to sell their house can easily do so, (and) go out there and find a reasonable supply of housing to purchase and have limited impediments to purchase, I would say (that) whether it’s by 2014 or 2015, we’re moving in that direction. The date for that recovery will vary by city, and some cities are further along than Chicago is, so for Chicago, 2014 may be very optimistic.”
Geoff Smith, Executive Director of The Institute for Housing Studies , DePaul University