Chicago-area residents may be interested to hear that the home prices in Lincoln Park, Lakeview, and Bucktown are nearing the peak that they had reached in 2007.  In fact, according to Chicago Real Estate Daily, an index of single-family homes in the North Side were merely 2.5% shy of the 2007 peak.

The broader area Chicago market is looking great as well.  In fact, 2013 yielded raising prices in all 235 Chicago-area zip codes - for the first time in 7 years.

Some Chicago area neighborhoods are even topping peak prices.  In Lincoln Park, homes on Paulina, Burling, and Menominee streets are selling for even more than their peak-era prices.

Last year underwent many bidding wars, resulting in numerous properties selling for more than asking price.

Are all Chicago-area homes nearing peak levels?

What is the best long-term investment option in 2014?  According to the April Economy and Personal Finances Poll just released by Gallup, Americans believe real estate is the best option.  

Real estate tops stocks/mutual funds savings accounts/CDs, bonds, and other investment categories.  It even tops gold, which was the most popular long-term investment back in 2011.

Why is it topping the list?  With the housing market improving across the US and home prices gradually rising alongside this, investing in real estate now is a smart, if not the smartest, way to invest your money long-term.

As the economy has recovered over the past two years, low price home sales (under $95,000) were the name of the game.  Investors abounded, snatching up these properties while they could, and fueling the recovery process.

In short, the investors did their job; but is it time for home buyers to take over?

According to the Real Estate Economy Watch, the discount priced homes were able to attract enough buyers to drive prices up a full 31.8% from 2011 - an impressive feat.  

Over this time, we worked with many frustrated home buyers who found themselves losing multi-offer situations to all-cash investors, developers, and rehabbers. As the investors competed with one another and conventional home buyers, supply shrank and prices climbed. 

While low tier home price gains were at 3.7% a year ago, they have now slowed to 1.2%.  This stabilization could be a trigger for first time and move-up homebuyers to engage in the market once more.

30-year fixed mortgages in 2012 were historically low.  Freddie Mac believes it is unlikely for them to return to recent lows.

If rates were to head back under 4%, that would, of course, be fantastic news for any prospective home buyer (or home owner who put off re-financing their current mortgage.)  

Unfortunately, mortgage interest rates are expected to rise this year, as we have recently written about.  

It is likely, in fact, that rates will look more like the greater than 6% rate of last decade rather than the less than 3.5% rate in 2012.

Note, however, that the current low is extremely low compared to historic averages, according to Freddie Mac:

The all-time record low – since Freddie Mac began tracking mortgage rates in 1971 – was 3.31% in November 2012. Conversely, the all-time record high occurred in October of 1981, hitting 18.63%. That's more than four times higher than today's average 30-year fixed rate of 4.32% as of March 20...rates hovering around 4.5% may be high relative to last year, but something to celebrate compared to almost any year since 1971.

Real Group Real Estate

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