Chicago Real Estate Investing – Trends and Forecast
The Chicago real estate market is slow to recover since the housing bubble burst (compared to other areas in the Midwest.) However it is now going strong and it will continue even stronger in 2018. Home prices are still at 19% below pre-crash levels, but they are expected to recover by 2020. The forecast is a 10 percent increase in sales volume in 2018 (according to Lawrence Yun, chief economist for the National Association of Realtors.) Chicago real estate definitely has been an uptrend market in the last few years, due to job growth and better economy. There are recent corporate expansion and relocation to Chicago for major corporate headquarters. Also there is a steady increase of jobs, 54,000 just this year, which triggered a 2% increase in housing rents.
Chicago Real Estate Investing: what does this mean to the real estate investor?
Creative real estate investors need a new way of looking at the marketplace. There is no doubt that the inventory of distressed properties has diminished considerably in the recent couple of years. Therefore investors who know how to find distressed properties should position themselves to capitalize on the increasing demand in the Chicago real estate market; from wholesale buyers, who are looking to fix and flip properties and put them back right away in circulation in the retail market, and long-terms investors, like landlords, who are looking to acquire more properties due to the rising rental demand and sell later when the market balances out.
The key is to achieve the best return-on-investment (ROI,) which means that the investor needs to concentrate his/her efforts on distressed, or below-market, properties in upcoming neighborhoods. Implementing the right lead generation strategy, and creating funnels of incoming property leads, is what most investors struggle with.
A few ideas on where to locate distressed properties:
- Public Databases – these public records are free and are the best source for property owners going through some type of distressed situation: pre-foreclosures, tax delinquent, bankruptcy filings, divorce filings, probate.
- MLS Extended Listings – sellers of properties listed on the MLS for a long time (90+ days,) are probably more motivated to negotiate.
- Driving for Dollars – there is still no better way to find the most recent vacant/abandoned properties and owners in distress than driving around and seeing for yourself the target properties.
For more information on the Chicago real estate market and how to locate distressed properties for wholesale or flip, join me at the next upcoming live training event in Chicago.