With expectations that price points are reaching bottom, home sales are starting to pick up, albeit slowly, in the Chicago suburbs of Naperville and Barrington and their surrounding areas, say two real estate agents who shared their market insights with Inman News.
The dawdling turnaround, they say, occurs as distressed properties — especially those at the lower end of the price spectrum — are getting gobbled up.
This Chicago-area real estate market report features a Q-and-A with Leisa DiVito, a broker associate for Coldwell Banker Residential Brokerage in Naperville, Ill., and Jeffrey Kershner, managing broker and CEO of Barrington, Ill.-based Silver Crown Real Estate.
DiVito is a 20-year-plus western Chicagoland resident and focuses her work on the purchase and sale of single-family residences, townhomes, condominums and income property. She works primarily in the Naperville, Ill., market area.
Kershner is the founder of Silver Crown Real Estate and has been a licensed real estate broker since 2005. He works in the greater Barrington, Ill., area.
On Wednesday, April 4, Inman News is offering Agent Reboot, a one-day tech tune-up event for Chicago-area real estate agents. The event runs from 8 a.m. to 3:30 p.m. at the Crowne Plaza O’Hare Hotel in Chicago (more details).
Q: Which types of properties are selling fastest in your market area?
DIVITO: Single-family detached homes in the 60564 ZIP code.
KERSHNER: Single-family homes in decent condition priced from $300,000 to $500,000. Homes in the $300,000 to $350,000 range had the largest number of sales (in) any price bracket, although there were sales at every bracket up to $3 million.
Q: Which types of properties are selling slowest in your market area?
DIVITO: Single-family detached homes in the 60563 ZIP code.
KERSHNER: Homes in the ultraluxury market are selling the slowest. There are 112 homes on the market at $1 million and above. In 2011, only 35 homes sold over $1 million meaning we currently have a 3.2-year supply of luxury homes.
Real Estate Market Stats: Naperville, Ill.
|# closed home sales (2011):||1,500|
|# closed home sales (2010):||1,547|
|% change closed sales (2010-11):||-3%|
|# closed home sales (latest month):||92|
|# closed home sales (for recent month):||67|
|% change closed sales (recent month in 2012 vs. same month in 2011):||37%|
|Average sales price (single-family, detached homes):||$382,000|
|Median sales price (most recently month available in 2012):||$280,500|
|% change sales price (recent month in 2012 vs. same month in 2011):||-15%|
|% share of distressed properties (most recent month available):||27%|
|% share of cash buyers (February 2012):||26%|
Sources: Midwest Real Estate Data LLC (MRED) multiple listing service and Coldwell Banker Market Quest. Paul Leganski, branch manager for Coldwell Banker’s Naperville, Ill., office, and Leisa DiVito compiled and prepared the market data presented here.
Q: How are the demographics of buyers and sellers changing in your market area?
KERSHNER: The area has an aging population and has had a number of years of reducing student population (currently 220) in the local school district at all grade levels.
Q: What is the level of activity among first-time buyers in your market area?
KERSHNER: As this is one of the more pricey markets in the Chicagoland area, there is not a lot of first-time buyer activity.
Q: What is the level of activity in the luxury market in your area?
DIVITO: Currently, there are 146 active high-end properties on the market, with 28 pending and 42 sold.
KERSHNER: The luxury market is represented by extensive supply, as stated above. There were 16.7 percent more sales of homes above $1 million in 2011 than in 2010, so it is moving in the right direction but there is an oversupply.
Q: What are the recent trends with home prices, sales and inventory?
DIVITO: We are seeing an increase in sales with a decrease in inventory.
KERSHNER: Home prices are at or near bottom and have not begun to rebound, except at the very low end. There is ample supply above $500,000. Sales are trending upward from 2011 but are still way off the highs.
Real Estate Market Stats: Barrington, Ill.
|# closed home sales (2011):||439|
|# closed home sales (2010):||448|
|% change closed sales (2010-11):||-2%|
|# closed home sales (latest month):||28|
|# closed home sales (for recent month):||21|
|% change closed sales (recent month in 2012 vs. same month in 2011):||25%|
|Median sales price (most recently month available in 2012):||$442,500|
|% change sales price (recent month in 2012 vs. same month in 2011):||-15.3%|
|% share of distressed properties (most recent month available):||28.5%|
|% share of cash buyers (February 2012):||25%|
Source: Midwest Real Estate Data LLC multiple listing service (MRED). Data prepared and compiled by Jeffrey Kershner.
Q: What is the current state of the distressed property market in your area?
DIVITO: They make up 16 percent of the market.
KERSHNER: Most of the distressed inventory has been worked through, especially at the lower price points.
Q: What worries you most about the current state of the market?
DIVITO: The limited amount of current inventory that is in turnkey condition. Buyers’ expectations have increased and the limited amount of inventory is causing buyers to hesitate in purchasing unless the property has been updated and is in excellent condition. Sellers need to be overprepared when marketing their homes.
Presentation and first impressions matter — the appearance of the front entrance, landscaping, all of the rooms, closet/storage and upgrades/updates will sell the property. This is not really a worry — (it’s) more of an overall awareness of buyer behavior and expectations.
On the flip side, buyers need to be ready to pull the trigger and purchase — or they will lose the house. We have started to see multiple offers on the best houses out there … of course, this is a great thing!
KERSHNER: The condition of the state of Illinois is troubling. We are not adding jobs at a very high rate and have state and local budgets that have some of the worst deficits in the nation. The prospects for job growth are hazy at best.
Q: What represents a sign of optimism and opportunity for the real estate market?
DIVITO: I’ve experienced an increase in first-time homebuyers. I believe this is due to low interest rates, coupled with low housing price points and an overall view that the market has hit bottom. In addition, I have experienced an increase in move-up buyers that are taking advantage of pricing in the higher-end houses.
KERSHNER: The volume of sales is up. We need that to work off the supply.
Q: What is the overall economic health in your market area?
KERSHNER: The economy is slowly growing in this area. Many of our residents are business owners or executives of major companies, and there is growing optimism about the economy.
Jeffrey Kershner is managing broker and CEO of Silver Crown Real Estate. He works in the northwest and western suburbs of Chicago. Leisa DiVito is a second-generation licensed Realtor who represents clients in the western suburbs of Chicago. She is a broker associate for Coldwell Banker Residential Brokerage.