Like the stock market, the housing market for Naperville real estate looks to be hinging on perception. That psychology, instead of using deep-seated logic and science, is surfing on the unpredictable waves hitting the shores.
Digging deep into statistics, we know that real estate in Naperville brings healthy long-term gains in value. The basics in the market are solid. There are low mortgage rates, a strong household formation rate, and new employment opportunities. These factors are extremely important for the stability of the Naperville real estate market.
The long-term investment in a home in Naperville will pay off. The $10,000 down payment on an average home with the average 5 percent appreciation in ten years will increase in value to $110,000. The same investment in the stock market growing at 10 percent would be worth $23,600. Buyers who learn the facts like these will not hesitate in today’s market.
What a great way to increase net worth! Data from the Federal Reserve shows that a typical renter is worth $4,000. The average homeowner is worth $184,400.
According to the National Association of Realtors this year, one out of sixteen U.S. households purchased—or they are in the midst of purchasing—a home. These people are enjoying the wide selection of available homes on the market. They are increasing their net worth by investing in themselves instead of paying for the property owners’ investments.
Because the mortgage interest rates remain low, buyers are willing to pay good prices for homes. Conforming loans are at historically favorable rates. However, credit is tighter. Since the August credit crunch, FHA loans are replacing subprime mortgages. The tightening of credit for jumbo mortgage loans has contributed to the slow movement of nicer homes, but that is somewhat offset by commercial development.
A necessary adjustment has occurred. Home sales are returning to the fundamentally healthy levels present before speculative excesses took over. Overly cautious buyers will find more competition in the New Year when the economy takes off again.
Surface perceptions will always fluctuate. If you want to invest in yourself and your family, dig a little deeper on a new land lot or in your new backyard. Contact Larry Shakman at 630-921-0611 or Larry@FeaturedHome.com for assistance when you are ready to make it happen.
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