The following blog post was originally posted on www.millierosenbloom.com by one of our River North Design District (RNDD) Members, and a realtor with Baird & Warner, Millie Rosenbloom. If you are looking to buy or sell in Chicago this year, listen up! Millie share’s her predictions of what’s to come with the Chicago real estate market.
Millie Rosenbloom’s Predictions for Real Estate in 2018
2017 was definitely a year for the books, but I am just as eager to get 2018 started! I’ve put together a list of my predictions for what the coming year will bring us in the world of Chicago real estate:
- Trump’s new tax plan: I think the new tax plan may slow our market in the beginning of 2018 while people digest the news, but ultimately it will have little impact on the market this year. From a real estate perspective, I will be closely watching these aspects of the plan:
- Mortgage Interest Deduction: The limit on deductible mortgage debt has been reduced to $750,000 for new loans taken out after 12/14/17. Interest remains deductible on second homes, but subject to the $1M/ $750K limits.
- State and Local Property Taxes: The final bill allows an itemized deduction of up to $10,000 for the total of state and local property taxes and income or sales taxes.
- Capital Gains Tax: No change here, but important to note that homeowners must live in their home two out of the past five years to qualify for capital gains exclusion.
- First-time buyers: We will continue to see a large pool of first time buyers in the 25-34 age group enter the Chicago market this year.
- Spring market: It will start early again this year!
- Interest rates: Will remain low for 2018, in the 4-4.5% range.
- New construction: We will continue to see an increase in new condos and single family homes although they will primarily be delivered in the $750k plus range.
- Supply and demand: 2018 will be very similar to 2017 in terms of supply and demand:
- Price: The median price of attached homes on the North Side of Chicago has increased roughly 3.5% each year for the past two years.
- Supply: There is currently a three month supply of inventory on the market with attached housing on the market, and a seven month supply of detached homes.
- Area of opportunity: The amount of home sales under $500K have been steadily decreasing over the past two years, while the number of home sales over $500K and $1M have been increasing. This presents an opportunity for move-up buyers who can sell their current home high and purchase a new home at the lower end of the price range.
About Millie Rosenbloom: Millie is a broker at Baird & Warner, where she has been number one in sales out of over 2,200 brokers for the past 10 years. She was inducted in the Chicago Association of Realtor’s Hall of Fame in 2014, and is routinely quoted and featured in multiple media publications and broadcasts, including CNN and The Wall Street Journal. Actively involved in the Chicago non-profit community, Millie is a committee co-chair of the Brain Research Foundation and the Magnificent Mile Association.