The condo market in Lakeview and in Lincoln Park is picking up and fast! Remember the days when you could stroll around the neighborhood and see 10 condos for sale on every block? Well, those days are long gone! Inventory levels in both Lincoln Park and Lakeview are the lowest in years. Builders are getting back into the game and selling out fast as well!
Currently I’m working with a couple who want a large 2 Bedroom or 3 Bedroom condo under 500k in Lakeview or Lincoln Park. They are open to all areas of these neighborhoods and believe it or not we can’t find much. The quality inventory that they have liked have all received multiple offers within days of coming on the market or within days of a substantial price reduction.
The buyers in this market are well qualified buyers. They have cash, they have credit and they have flexibility to work around the sellers demands. Whoever thought the sellers would be back in control?
Why is Inventory Low?
In my opinion supply is low for a few reasons:
1. OVER 20% OF SELLERS ARE UNDER WATER: Many sellers are currently under water. In Lakeview / Lincoln Park this is true for your smaller 2 Beds and for your high rise buildings in comparison to many of the duplexes that have held their value a bit better. However, at the end of the day there is a chunk of the population that cannot sell unless they want to bring cash to the table or go through the short sale process.
2. SELLERS CANNOT GET WHAT THEY WANT: While prices have stabilized and inventory is flying off the shelves we are not seeing a large increase in pricing. There are sellers who may not be under water because they had a substantial down payment, but they still do not want to take a loss on their property. These sellers are not coming to market.
3. DEMAND HAS INCREASED: Overall demand has increased. As the economy has improved, or at the very least become “stable” we have seen more buyers come to market. Rent prices have increased causing many renters to become buyers after finding the rental search process frustrating and exorbitantly expensive. Interest rates remain at record lows as well posing the question in many potential buyers’ heads “Why am I not buying right now?”
So at the end of the day what does all this mean? Does this mean that we will see prices rising again? Not necessarily.
When we look at the reasons why supply is look we have to understand that there is still a want for these people to sell. Just as there has been built up demand due to uncertainty in the market there is also built up supply from those who want to sell if prices ticked just a bit higher. I believe what we will see for the coming years are prices slowly increasing but then some sellers taking advantage and putting their units on the market in hopes of achieving what they wanted. Supply will continue to come on line, but just at a slower pace. Buyers will remain ready, willing and able to move forward once they find the right place.
The one thing to keep in mind in all this is while inventory levels have decreased, buyers are still picky. They want quality! At the end of the day if you don’t have a quality unit to sell you will not sell it and you will need to deeply discount the price. Buyers now are pickier than ever. They want to buy, they’re eager to jump into the market, but they’re conservative!