In this article, we’ll share a housing market update for the New Trier Township. There’s some pretty surprising data that’s a direct result of higher interest rates, so let’s get right into it!
As you know, interest rates were at a historic low during the pandemic, and in the spring of 2022, the Federal Reserve began raising rates in an effort to ease inflation and effectively slow down the market.
Now that we’ve been in that higher-rate environment for over a year, we can clearly see the impact to the market.
Media Sales Price
The chart below shows the median sale price for single-family homes in the New Trier area. You can see how prices really started to take off in 2020. As interest rates began to rise in 2022, there is a clear spike in prices as buyers were eager to lock in those rates.
Most surprising to us is that prices across the area have been relatively flat over the past 12 months. The higher rates have essentially slowed the rapid price increases that we saw from 2020-2022. Now to be clear, each Village and each home is unique with some up and some down, but it’s helpful to take a look at the entire region to get a sense of the trends.
Months Supply of Inventory
Now let’s look at Months Supply of Inventory in the graph below to understand supply and demand.
If no new houses came on the market, how long would it take for the existing inventory to sell out? Pre-pandemic, it was around 6 months. Once the pandemic started, the demand severely outpaced the supply, and we have now been hovering around 1.3 months of inventory for the last two years.
What does this mean for buyers and sellers?
Sellers:
It’s still very much a seller’s market. We aren’t seeing any shift in terms of the months supply of inventory and the number of homes for sale is at an all time low. However, and this is a big one, you have to understand that because there are so few houses on the market, that means all of the eyeballs are on YOU. When your house hits the market, everyone is watching. Buyers are at home analyzing the floor plan and critiquing each photo. You can’t just wing it… you and your home have to be more dialed in than ever to execute a successful launch.
Buyers:
Unfortunately, the market is still tough for buyers. You have to move fast, know your numbers, and be prepared with all of your financing in order. When it comes to prices, you can see from the data that there are no indications that prices will drop significantly. Our market just went through the most aggressive interest rate hike in history. The prices just flattened out, they did not decline. If rates start to dip back down, we could see demand increase even more and drive prices higher again.
Our biggest recommendation? Align yourself with an agent who is very knowledgeable on the local market and can help you navigate the process.
That’s it for this month’s market update. Check out this video version of this blog below!
If you have any questions, don’t hesitate to reach out!
