Are you in the market for a home in Illinois this year? If you’ve been looking since 2020, it’s no secret that you’re not alone in your search for an abode.
Despite historically high unemployment and other pandemic-related impacts on the economy, realtors and real estate attorneys like Adam Diamond Law are busier than ever. Demand for housing is so high, people are paying tens of thousands of dollars above the asking price. Sellers are sifting through multiple offers at a time.
While that lends itself to being a seller’s market, with incredibly low interest rates on mortgages, is now a good time to join millions of other Americans in buying a home in 2021? In short, it depends on your endgame.
What to consider before buying a home in Illinois in 2021:
Before you decide whether it’s the right time to buy a home in Illinois, consider why you’re buying in the first place:
- Is it an investment home you hope to lease? If so, there is good news and bad news. The good news is that demand for affordable rentals is also up substantially. The bad news is rental properties with good cash flow and equity are hard to find.
- Is it a house for you and your family? If so, then it’s important to have all your ducks in a row before entering such a competitive market.
- Before you start shopping for your dream home, make sure you have a lender secured and your credit scores are where they need to be. If your credit score was high enough for a home loan before the pandemic, you may want to check it again before you start looking. Some lenders have raised their credit score minimums in response to a pandemic economy.
- If you’re in a hurry to close, then be prepared to offer well above the asking price – and be ready to compete with some buyers offering all-cash deals.
- If buying a new house is contingent on selling your current home, there will likely be other buyers bidding on the home you want without the baggage of having to sell another home first.
- Home prices are up a record 17 percent, but if you wanted to wait and see if the rates cool in 2021, you may be out of luck. Economists predict that home prices will continue to rise this year, though not at the explosive rate they did in 2020.
- Home prices may be going up, but interest rates are expected to stay extremely low. If you want to lock in a good interest rate, this might be your year to buy.
- Is it a house you intend to flip? Just like buying a rental property, these opportunities are hard to find. It is critical to know your numbers to make sure you know what you are getting into.
When is the best time to buy a house?
If you’ve considered all of the above and decided it’s a good move for you to buy a home in Illinois, now it’s time to think about when in 2021 you want to make the purchase:
- Spring and early summer are peak home-buying seasons. This means that both housing inventory and flexibility on prices will be lower in those months than other times in the year.
- Analysts say August is the best month to buy a house because sellers are lowering their prices before the fall.
- You may be able to get a better price in late fall and winter, but supply will be lower and you’ll have fewer homes from which to choose.
This doesn’t mean you should avoid home-shopping in any particular month. Regardless of market trends, you should buy a home when it’s the right time for you.