Residential real estate sales have been hot so far this year in the Carpentersville, Algonquin and Crystal Lake areas, said Hilda and Jennifer Jones, Realtors with Baird and Warner's Carpentersville office.
"It has been extremely active," said Hilda, a Realtor since 1977. "In fact, things have been going gangbusters with all types of buyers in the market."
By the end of June, Jennifer said, the office had already done as much business as it did in all of 2012 in terms of dollar volume.
The mother-daughter team sells primarily in McHenry and Kane counties, but also some in Cook County.
"In the past year, single-family homes in McHenry County have increased in price an average of 4 percent and have seen a 21-percent drop in time on the market," Jennifer said. "In Kane County, prices have also risen 4 percent and the time on the market has dropped 22 percent."
We asked these two realty professionals about the current suburban market:
Have you seen much difference between how single-family homes, townhouses and condominiums are selling?
"People are looking at the townhouses again, but they know they can get into a nice single-family home for very little more, so many of them are choosing to buy a single-family home instead," Hilda said.
The fact that most multifamily complexes charge monthly association fees can dissuade buyers, Jennifer said. If a buyer has to pay $150 a month for an association fee, they can instead afford a single-family home worth $10,000 to $15,000 more than the townhouse or condo, so that is what many buyers elect to do, she said.
"When thinking about buying a multifamily home, you have to account for not only your monthly mortgage payment, but also those monthly fees, so the monthly cost can be higher than if they just bought a larger home," Jennifer said.
"In addition, many complexes have lost their FHA certifications, so it can be harder to get financing to buy a multifamily home," Hilda said.
How does the local market compare to what you are hearing in the national media?
"Illinois lags behind the rest of the country because it is one of a very few states that is a judicial foreclosure state. In order to foreclose, a bank must go to court. So it takes (banks) a year or longer to take possession of a home and turn it into a real-estate-owned property," Jennifer said.
In part because of this, sale prices nationally rose 5 percent, yet in Illinois they simply stabilized. Now Illinois has seen a rise of 3 to 5 percent in prices this year, like the rest of the country saw in 2012.
"There is a lot less foreclosure inventory on the market here now," Jennifer said, "and short sales are going through faster. Bankers are getting better at handling them and getting these houses off their books before they own them. So the traditional real estate market is starting to ramp up."
Are first-time buyers still taking advantage of the low prices and interest rates?
"They are still out there. In fact, it looked like interest rates were starting to pop earlier this summer. So many got worried and were shopping in earnest," Hilda said.
What about other categories of buyers? Are we starting to see a domino effect?
Some sectors that sold slowly in the last few years are starting to move now, Jennifer said. "People are starting to get used to the new reality and they are realizing that now is a good time to move up to a larger home. If they lost 40 percent on the value of their home, so did the owners of the larger home they want to buy. And, ultimately, they will make up their loss on the amount they will save on the larger home.
"Besides, there is so much pent-up demand out there. People are ready to move on with their lives. Retirees want to downsize. Companies need to relocate employees. Young people want to get married and start families and move to areas with good schools."
"It took a lot of years for people to adjust to this new market," Hilda said. "It was a hard pill to swallow but people now understand that this is just the way it is. They have to move forward."
"Many people still have to bring a check to closing, or they are holding on to their property and renting it. But they are moving on with their lives at last," Jennifer said.
What still needs to happen for the local real estate market to strengthen?
"Consumer confidence in the economy is turning around little by little, but it needs to strengthen further and the job situation needs to improve," Jennifer said. "Both need to happen for there to be a substantial uptick in home values. That said, foreclosures and short sales are no longer holding back the market, so the traditional market is coming back in a big way."
Hilda and Jennifer Jones can be reached at (847) 783-6118 or visit www.hildajones.com. Their office is at 2160 Randall Road, Carpentersville.