There Has Never Been A Better Time To Invest In Chicago:- Residential Inventory is Low in Chicago and that Means It’s Time to Buy Buy Buy. Right now is a unique time in Chicago real estate and a time of great opportunity for the real estate investor. Currently inventory in Chicago is at a historic low and, oddly enough, so is the price of residential real estate.

Chicago real estate investing

In most cases, if inventory is low, the price of homes rises accordingly. Simple supply and demand dictates that, but these are not simple times. Interest rates are artificially low as the federal government attempts to bolster a slowly recovering economy. Because of the economic troubles unemployment rates have been high – though that is slowly correcting itself.  Banks tightened their lending practices, and coupled with a still reeling building industry, housing starts fell to historic lows, but those same tight lending prices prevented housing prices from rising to their natural level given the low inventory. Average days on market ballooned, and sellers cut prices as their homes lingered on the market with “For Sale” signs weathering in the yard.

The aforementioned trend is one that was seen across all of the United States, but it was especially pronounced in Chicago.

•    Inventory in Greater Chicago is currently down over 51 percent from its height of 70,478 in June of 2007.

•    Median sale price in Greater Chicago is currently down over35 percent  from its height of $309,900 in August of 2006

•    Industry experts expect the total number of housing starts in 2013 to be around 4,000. That is the largest amount of new construction seen since the crash, but it is scarcely one-fifth the amount of new homes that is considered normal in Chicago.

Unnatural market conditions cannot last indefinitely, the market will correct itself, and that correction will inevitably be a positive one. The only question is when. Regardless of how quickly that correction occurs, now is the time to invest in real estate – especially residential real estate – in Chicago.

The Short Term

In the short term, an investor’s primary concern should be the amount of rent he can expect to collect. That number is steadily increasing due to the low housing inventory. According to Zillow.com rents in Chicago rose an estimated 5.3 percent last year, and with housing inventory still low and potential buyers unable to find that perfect home or get financing, they are expected to continue to rise. It’s especially telling that even with rents increasing at a higher than normal rate, the vacancy rate continues to fall.

The Long Term

Long-term real estate investors want their properties to increase in value. One way to increase the value of a home is to buy it cheap at a foreclosure auction and rehab it, but investors should never neglect to take into account appreciation that comes from a strong real estate market. That is at the core of a leveraged real estate investing strategy.

As of today, the median asking price for a Chicago home has increased by 4.8 percent from the same time last year. This comes after several years of steadily declining prices. That’s excellent news for investors. That means that the residential housing market has reached the bottom and is beginning the slow climb back up. Given the still low number of housing starts, existing homes will likely appreciate at an accelerated rate over the next five years as the economy recovers and builders struggle to meet the demand for new homes. It’s important to emphasize that this projected increase in price is not another bubble; it is simply the price rising to its natural level.

Given the current market conditions, trends and projections, there has never been a better time to invest in Chicago investment properties.