Over the weekend I wanted to get a clearer idea about just how active the 2013 real estate market is on Chicago's North Shore. I looked at the towns beginning in Evanston and went north to Lake Bluff, and then from the Lake to the west side of Northbrook. I collected data for homes listed beginning Jan 1 2013 and compared that to the prior two years. Then, after catching my breath, I looked at the velocity of sales - how many homes are going off-market. That is, homes going under contract, PENDING or SOLD. When I complied the data my first reaction was, "WOW!" And after some consideration I understand why the market "feels" frantic and why sellers are pricing more aggressively. The next step, based on today's housing report (“Home Prices Up 12% in April”) is to look at pricing in each of these communities. WHY? We need to put the proper perspective on what is happening to prices in our markets. The national media is great at helping us understand that we are beyond the Crash of 2008 - 2011. Case-Schiller indicates we are back to a “normal”, long term growth rate of, approximately, 3%. Still, pricing is the grease that helps the real estate market run smoothly. Unrealistic pricing strategies increases inventory. With higher inventory, prices suffer. Also, with last Thursday's interest rate shock, the concept of affordability is changing. While the vast majority of homeowners remembers 6 and 7% mortgage rates, there is a large number of home buyers who remember the historic lows! If we use last week’s rate of 3.75%, the jump from 3.75% to just 4.5% is a 20% increase. Not only will buyers will be able to afford LESS on a monthly basis, but they will also be more aggressive in bidding for a home. So, Sellers must be dialed into pricing. I'll have that report ready by the end of the week. If you have any comments or questions, please post them on my Linked page. Have a great week.

DS

2,298

2

2,747

2,426

0

500

1,000

1,500

2,000

2,500

3,000

FY 2011 FY2012 FY2013

North Shore Listings by Date 2011, 2012 & 2013 Detached Housing

Listings are 56% ahead of 2012

Source: MRED 2013

1,726

2,189

1,480

0

500

1,000

1,500

2,000

2,500

FY 2011 FY2012 FY2013

North Shore Off-Market, by Date 2011, 2012 & 2013 Detached Housing

Properties Going Off-Market are 44% ahead of last year.

Source: MRED 2013