The real estate business in the Chicago area has taken a significant spike since March, finally picking up steam, said Tom Zander of Picket Fence Realty in Mount Prospect.
"For the first time in six years, we are seeing multiple offers on houses and that is a good sign," he said, "because when you get two and three offers on a house in the early days after it is listed, the seller gets a price that is closer to the asking price."
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"I truly think that we are at the bottom of the market at last, short of any catastrophe, and we are pretty resilient these days. We have learned how to take bad news well," Zander said.
The real estate market, he explained, is like the Queen Mary. It takes a lot to start it, but once it picks up momentum, it is hard to stop it again.
Between Jan. 1 and July 31 in 2011, for example, Zander's office in Mount Prospect sold 153 single-family houses and 97 condominiums and townhouses. This year, during the same time period, the agency sold 208 single family homes and 112 condominiums and townhouses, showing a healthy, noticeable increase.
And it isn't just new listings that are selling. Foreclosures and short sales comprise 20 percent of the local market, Zander estimates, so the inventory of such homes is gradually thinning out.
"Foreclosures are very simple because you have a motivated seller -- the bank," he said. "Short sales, however, are horrendous. They can take six months to work through so you need a buyer who is willing to wait."
Is any particular sector of the market recovering more quickly than others?
Everything is selling, Zander said, but single-family houses are the most active.
"Think about what was being built when the bottom fell out of the market back in 2006. It was condominiums and McMansions. Some of those have fallen to less than half of their original value."
The price of the average home in this area, on the other hand, has fallen by 35 to 40 percent, Zander said.
"While the buying population has diminished, those homes in desirable areas that were popular before the bottom fell out -- like the country club area of Mount Prospect, Cumberland in Des Plaines and Scarsdale in Arlington Heights -- remain popular. Those areas have weathered the storm best."
Are gas prices having any effect on what people are buying?
"I think that people have become numb to gas prices because they have been high for several years.
"But towns that have the option of train transportation are definitely on buyers' radars. Having that option near your home is like having hardwood floors. Both are universal good traits because people realize that taking the train is much cheaper than paying for gas and parking downtown."
How do the city and suburban markets differ currently?
"The city market didn't fall as much as the suburban markets did because young people want to live down there and they are the most active group in the real estate market currently."
Are first-time buyers with no home to sell taking advantage of the low prices and interest rates?
"First-time buyers are enjoying the best of both worlds. Interest rates are so low, it is like borrowing from grandma. In addition, prices have fallen to 2002 levels so they can get quite a deal whether they are buying in the city or the suburbs."
What needs to happen for the residential real estate market to permanently recover?
"The presidential election is still a big question mark. No matter who wins, at least people will know what to expect once it is over. I think that after the election more people who have been sitting on the sidelines will get the bug to jump into the real estate market.
"We also need the national media to announce that we have hit the bottom of the market, when they believe that is true, of course. Prospective buyers tend to watch what other people are doing, and (they) think that if no one else is buying, they shouldn't buy either."
Job losses also need to wane so that people feel more confident, Zander said.
"The real estate market is a huge barometer for this country. When it comes back, it will bring a lot of other sectors of the economy back with it. Even Sept. 11 (terrorist attacks) didn't stop the American real estate market. It was just a hiccup. So, this recent situation was really severe."
Zander and his wife, Mary, have been partners in the real estate business for 23 years. They opened the Mount Prospect office of Picket Fence Realty in the fall of 2001. For more information, call (847) 259-8600 or visit www.PicketFenceRealty.com.