Good things are happening in the local real estate market, but it is also experiencing some growing pains, said Bob Wisdom of RE/MAX Horizon in Elgin, who sells as a team with his wife, Lisa. Finding the perfect home right now might be difficult because of a shortage of available homes.
"Prices are finally going up in the areas we serve in Kane, McHenry, Cook and Lake counties, due to the fact that inventory is so low. A shortage of homes like this is what was ultimately needed to finally drive the prices up," he said.
"And since Kane and McHenry counties were among the worst hit counties in Illinois, we had a long way to come back," Wisdom added.
Interestingly, however, the prices haven't yet risen as much as one might expect. So, bargain hunters need not despair. There is still time for them to hop into the market.
Apparently, even though recent news reports have discussed the falling foreclosure rates in Illinois, foreclosures that occurred in recent years are still affecting the market. Wisdom said banks held back their inventory, hoping to sell at a higher price, and are now releasing more of those homes for sale.
That is why many conventional sellers in the middle to upper price ranges are still holding back, hoping for a better price.
Add to that -- the weather.
"We have also been off to a somewhat slow start this year with sellers and buyers because of the weather. It can really affect the market because people don't want to go out and look when it is so miserable," Wisdom said.
"But we know there is a lot of pent-up demand out there so we expect that it will get very busy when spring comes."
Do you see more movement in any specific sector?
"The shortage of single-family homes has caused us to see a big turnaround in condominium and townhouse sales. They are selling again and our inventory of them is also quite low."
Affordability has caused people to reconsider townhouse and condominium living. Single-family homes are once again more expensive and they are also harder to find.
Are first-time buyers who have no home to sell still taking advantage of the market?
According to Wisdom, the first-time buyers market is still strong, while the move-up market is steady and the $500,000 to $700,000 market is doing well.
There is also still steady interest from investors who want to either improve and resell or "flip" the home or improve and rent the home. Investors are particularly interested in homes in the $130,000 to $140,000 price range, Wisdom said.
How does the local market differ from the national real estate market?
"Certain areas of the Chicago-area market are doing better than the national market and others aren't doing as well. Chicago, for instance, is selling better than the suburbs. We just see slower growth in the suburbs because many young people want to live in the city."
What needs to happen in order to further strengthen the Chicago-area real estate market?
"All the indicators for the future are positive so we are very optimistic. But the market is still volatile, so you never know. Fluctuations in all the little expenses like gasoline and heating bills can still throw things off.
"But we believe that as long as the interest rates remain relatively steady and people have money, the market will continue to stabilize. Buyers have saved their money and have become more educated about buying a home. So they aren't going to overpay anymore and they are cautious."
What is your advice to potential sellers?
"This is a great time to list your home to sell because you can count your competition on the fingers of one hand."
However, sellers need to understand that today's buyers are picky, Wisdom said. They don't want to do a lot of work on the house they buy. So it is very valuable to make sure the paint and carpeting in the home you hope to sell is neutral; that you have reduced your clutter; and that you have enhanced the curb appeal of your home as much as possible.
"Buyers tend to gravitate toward homes that don't need as much work. So, if you put in some work to update your home, those efforts will pay off."
To reach Bob and Lisa Wisdom, call (847) 695-8348 or visit online at www.teamwisdomrealestate.com.