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The Top Notch Realty Team
at Keller Williams Success Realty presents the Illinois Housing Market,
courtesy of the
Illinois Association of Realtors
2
Housing Is a Hot Topic
• 2007 was a year of challenge!
• Negative headlines
• 2008 is a year of OPPORTUNITY for serious buyers.
3
REALTORS® Are Market Experts
• 60,000 Illinois REALTORS®
• REALTORS® track median home sale prices using Multiple Listing Data
• REALTORS® advocate for private property rights
4
Positives in the Market
• 2007 – 5th highest year on record for home sales in the United States
• Still historically high level of sales
• Off from unsustainable peak in 2005
(National Association of REALTORS®)
5
Positives in the Market
• 1 out of 16 American households bought a home in 2007
• Speculators are gone
• Mortgage interest rates to average 6.4% in 2008
(National Association of REALTORS®)
6
Real Estate = Best Investment!
Buying a home is the single best investment people can make!
• Shelter
• Security
• Wealth accumulation
• A good long-term investment
7
Real Estate = Best Investment!
• On average the value of a home nearly doubles every 10 years.
• The average renter’s net worth is $4,800. The average homeowner’s is $171,700.
(National Association of REALTORS®)
8
Real Estate = Wealth Builder
• A homeowner whose home appreciates at a typical annual rate of 5% with cash down payment of 10% generally will receive a 94% return on that cash after owning the home only three years.
(Harvard Joint Center on Housing)
9
Housing - Impact on Illinois Economy
$5.5 billion or 1% of Illinois Gross State Product (GSP) comes from:
Residential Property Transactions and the related expenditures from buyers & sellers
(RCF Study 2007)
10
Housing - Impact on Illinois Economy
$28,413 – direct expenditures related to a housing transaction
11
Housing - Impact on Illinois Economy
$11.9 Billion Total effect of Illinois output(purchases and sales between industries
throughout the process)
(RCF Study 2007)
12
Illinois Housing Market
• Median price holding in a steady range
• No steep declines like the coasts
• Affordable prices $203,000 Illinois median $254,500 Chicago median
(IAR Market Stats, YTD Jan-Nov 2007)
13
Illinois Housing Market
• Sales are lower comparing 2007 to 2006
• Illinois -16.3 %• Chicagoland -19.6%
(IAR Market Stats, YTD Jan-Nov 2007)
14
Local Housing Market
[add 1 or 2 slides on:] • local market median
price and sales data • positive factors for
local market in 2008 • RCF study results for
local MSA
15
Housing Follows Jobs
• “The slower growth rate for jobs in Illinois, especially outside of Chicago, continues to be a drag on the state’s recovery from the 2000 recession.”
• It will be well into 2009 before the state recovers its prior employment peak of November 2000.
(University of Illinois Regional Economics Applications Laboratory 2008 Forecast)
16
Homeownership Rates
• 70.4% Illinois
• 71.9% Midwest
• 68.2% United States
(U.S. Census, 3Q07)
17
Mortgage Interest Rates
• 6.40% - U.S. forecast for 2008
• 16.63% – 1981 (High)
• 5.90% – 2003 (Low)
(Freddie Mac, NAR)
18
A First-Time Buyer’s Market
• If you’re a first-time homebuyer, this is one of the best markets in years!
• Housing stock is plentiful and there are good mortgage rates available for those with good credit histories seeking conventional mortgages.
19
Underlying Factors Support Housing
• Strong household formation fueled by population growth.
• Immigrant homebuyers.
• Gen Y “Echo Boom” (2nd largest generation in U.S. history)—just entering home-buying years.
20
Underlying Factors Support Housing
• The Baby Boomers remain in peak earning years and are investing in real estate as they near retirement.
• The economy is stable.
• Low mortgage interest rates.
21
Changing Market – Local Is Key
• “Local market conditions are different from what’s happening nationally, so it’s best to work with a local real estate professional to determine timing, pricing and the best value.”
• “Homes that are priced to reflect the realities of today’s market will sell.”
22
• Oil prices• Consumer confidence• Presidential election• Job gains expected
for late 2008 & 2009• Subprime effect
lingers
2008 U of I Housing Forecast
(University of Illinois Regional Economics Applications Laboratory 2008 Forecast)
23
2008 U of I Housing Forecast
• Median price to modestly decline in 2008 (-0.34 to -1.58%)
• Chicago market expected to be more buoyant than the state (up 2.24% to 5.16%)
(University of Illinois Regional Economics Applications Laboratory 2008 Forecast)
24
Top Notch Realty Team website• Tips for buying a home• Tips for selling a home• Illinois market facts• Financing options• Free Home Valuation• Market Snapshot• Buyer & Seller
resources, and coming soon MAP IDX technology for buyers.
25
Mortgage Lending Trends
• Credit tightening has occurred
• National REALTORS® October forecast -mortgage markets are improving
• New and existing homeownership programs help
26
First-Time Buyer Programs
• NEW! Assets Illinois Homeownership Project, www.dhs.state.il.us/assets
• 850 homeowners across the state
• Required financial and homeownership education
• $2,000 match toward first home
27
First-Time Buyer Programs
Illinois Housing Development Authority, www.ihda.org
• I-Loan 30 - below market, 30-year fixed rate mortgages
• NEW! I-Loan 40 - below-market, 40-year fixed rate mortgages
28
Subprime Refinance Program
NEW! FHA Secure www.fha.gov
• Allows people to avoid foreclosure and refinance with an FHA-insured loan
• Some eligibility requirements
29
More Buyer Programs
• Partnership for HomeOwnership, www.pfho.org
• Our Own Home, www.ourownhome.net
• FHA Loans, www.fha.gov
• USDA Rural Development, http://www.rurdev.usda.gov/il/
• VA Loans, http://www.homeloans.va.gov/
• Local, state, federal programs
30
Yes, the Market has Changed
• You need the expertise of a REALTOR®
• It’s a very good time to buy and invest!
• Low interest rates, high inventory!
31
How a REALTOR® Can Help
• Comparable market analysis
• Set the right price
• Negotiate the best deal
• Mortgage & finance options
• Market the home
• Prepare the home for sale
• Navigate the paperwork
32
Don’t Go It Alone!
• FACT: Sellers who use a real estate professional make an average 16% more on the sale of their homes than sellers who go it alone.
• It’s no surprise that only 12% of sellers chose “For Sale by Owner” in 2006.
(National Association of REALTORS®)
33
Don’t Go It Alone!• Buying or selling a
home is one of the most important decisions – and largest financial transactions – anyone can make!
• Choose a REALTOR® from the Top Notch Realty Team at Keller Williams Success Realty!