Despite the threat of rising interest rates, local real estate agents are confident that 2016 will be a busy year for buying and selling homes.
“I’m very optimistic overall and expect good things from the market in 2016,” said John Lawrence, broker/owner of Oak Park-based Weichert Realtors, Nickel Group.
The spring market (starting right after the Super Bowl) will be extremely busy — buyers will need to be aggressive, especially in the entry level single family homes, said Lawrence.
“Inventory will continue to be low in tri-village area, giving properly priced sellers an advantage during the spring market,” he said.
Interest rates will finally rise, creeping towards 5 percent by the end of the year, predicted Lawrence.
“I don’t think that this will have a negative impact on the market, as these rates are still historically low,” he said. “If anything, it will make the spring market crazier with people who want to get in at lower rates.”
Median prices will continue to continue to rise, reaching 4 to 5 percent as the market sees fewer distressed homes in the area (like short sales and bank-owned homes), said Lawrence.
Over at Gagliardo Realty Associates in River Forest, owner/broker Andy Gagliardo is looking even past 2016 with his predictions.
“I look for great things next spring and beyond for next year,” said Gagliardo. “The last few springs have been a little bit better than the previous.
“The creeping interest/mortgage rates will probably have some effect on pricing, but overall I still think we will see an increase — as long as the rates don’t make drastic increases,” said Gagliardo.
Along with all of the aforementioned, there are a lot of millennials coming to the marketplace and it seems like the job market is opening up — so that helps housing too, said Barry Paoli, owner of Century 21 McMullen Realty, which borders Harwood Heights.
“This year is going to be a very good year, with interest rates being reasonable and the need for housing — it’s big out there,” said Paoli.
Forecasting a “flat” 2016 in the industry is Jonathan Zivojnovic, owner and managing broker at River Elm Properties in Elmwood Park.
“There is much speculation on what type of impact the interest rate increase is going to have on the real estate market — my answer is no effect at all,” said Zivojnovic. “The reason being is the days of an interest rate affecting the power of someone to purchase a home are all but gone, as lending rules and legislation have pretty much eliminated any buyers who had a marginal chance of being approved for a mortgage from ever even applying.
“Secondly, there’s a lack of supply in regards to inventory, causing many non-first time homebuyers to stay put instead of trying to buy and sell,” said Zivojnovic. “This same diluted pool is also bad for first time homebuyers, as the prices of homes have increased due to the short supply, knocking them right out of the game.”
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The one bright side in 2016 will be new construction, said Zivojnovic. In an area like Elmwood Park, where the housing stock is dated and room for new development sparse, any new construction activity is going to draw a lot of attention, he said.
“With several new construction homes sold in 2015 and several more slated for 2016, it should continue to be a strong sector of the local market,” said Zivojnovic. “Another interesting characteristic is the luxury rental market, where new construction buildings in Elmwood Park will be ready for delivery in early spring. The demand for these units will likely set the tone for future luxury rental developments that has proven to be in high demand in the surrounding towns.”
Felicia Dechter is a freelance columnist for Pioneer Press. Got a real esate-related story idea? Email [email protected].