The Chicago Home Luxury Chicago Real Estate

The Chicago Home

Prudential Rubloff


How’s the market from Prudential Rubloff-February

We hear this question all the time, and we’re sure you do too. We thought you might like to know how we look at our current market conditions. Perhaps more than any other year in recent memory, people heartily welcomed 2011. The National Association of REALTORS® forecasts a gradual improvement in the housing market into 2011. Existing and pending home sales are in a growth pattern as a result of steady improvements in the economy, and we expect the upper end to continue the gains in activity seen in 2011. We’re pleased to report that our sales volume increased over 24% in 2010 compared to 2009 figures. This increase is greater than that of any or our major competitors and compares very favorably to the overall increase in MRED of 1%.

PRICES – Stable to slightly down
One of the factors contributing to the increased activity is more realistic pricing on the part of sellers. We expect modest price declines during 2011, likely to be in the range of 3-5%.

INTEREST RATES – Remaining very favorable
Though it’s impossible to predict with any certainty, interest rates are expected to rise slightly in 2011. Qualification standards continue to be high, but are still extremely favorable for buyers who can obtain credit. The combination of low prices and low interest rates makes it a great time for qualified buyers.

OUTLOOK FOR SELLERS – Focus on Price and Condition
In spite of the improving real estate market, sellers would be well advised to be priced “at the market.” Inventories and absorption times increase significantly as the price point increases. Of those properties that go under contract, 75% do so in the first 90 days on the market. Short sales and foreclosures will continue to depress prices for the next couple of years, and they are also negative factors that appraisers have to take into account. Consumer confidence, driven by high unemployment and concerns about the overall economy, continues to be a factor. Condition is also very important, as buyers know that they can afford to be picky. As the saying goes, “It’s a beauty contest and a price war.”

THE GENERAL OUTLOOK – Still challenging, but improving
We think that the market is on the road to recovery, and we expect continued gradual improvement. As we have noted before, studies have shown that it takes about as much time to recover from a recession as it took to bottom out. That being the case, complete recovery could take several years. While this sounds negative, in fact it is positive, as it implies continued improvement over the next several years as we work our way through a very challenging market.


  • Gradually improving market with increasing sales activity
  • General feeling of optimism among real estate professionals
  • Very favorable interest rates for the near term with increases anticipated by the third quarter of 2011
  • While definitely improving, inventory levels are still high and absorption rates are low, particularly at higher price points
  • Historically high unemployment and low consumer confidence
  • A great time for qualified buyers who can obtain credit-maybe as good a time as we have ever seen
  • Sellers should price conservatively and do everything they can to make their homes outshine the competition

You will find your sales professional has a strong knowledge of the marketplace and we are proud to say that our agents’ dedication to your success is unmatched by their peers in our marketplace.

– Michael Pierson & Chris Eigel
January 17th, 2011

Filed under : Blog