The suburban Chicago real estate market has done a total flip in recent years, said Leslie Radzin, a broker with RE/MAX Suburban in Arlington Heights.
During the depths of the recession, there was a huge inventory of homes on the market and few buyers, resulting from general economic fears and very tough mortgage qualification requirements at the time.
Today, however, it has all changed. There are very few homes in inventory and a healthy source of interested buyers fighting over them, Radzin said.
"When a home goes on the market now and is priced well, it will sell very quickly -- sometimes in only one day," she said. "A Wheeling home recently went on the market for $120,000 and there were 17 offers on it."
That is even happening to homes in the $300,000 to $400,000 price range because lenders are gradually whittling down their inventory of bank-owned, foreclosure properties, so there just aren't as many houses now available from which to choose, Radzin said.
Short sales are no longer much of a factor, either. The banks are still taking a very long time to make up their minds about offers on those homes -- six months to a year on average -- so brokers and even potential buyers don't want to be bothered. They would rather hop on an unencumbered house while interest rates remain low.
Realtors also seldom use short sales in their calculations of comparative properties when pricing homes because so many other sales are usually available for use. So the deflated values of short-sale homes are no longer dragging down the prices of nearby properties the way they once were, Radzin said.
"In some cases, prices here have risen 30 percent from the bottom of the market," she said. "We are not at boom prices yet, of course, but if interest rates remain low, we will eventually get there because a lot of people can buy (a house) at a better (monthly) price than they can rent."
Are you seeing more movement in any one sector of the market -- single-family, townhouse, condominium?
"Everything is selling now unless it is overpriced. If you see a property of any kind sitting on the market for four or five months now, you know that it is not priced right or that there is a problem with the property."
How does the Chicago market compare to the suburban market?
"Chicago properties are very hot again. They are attracting lots of foreign investors who are buying properties and then renting them. Obviously, they believe it is a good time to invest in the United States and in Chicago, so Americans should probably do the same."
This phenomenon is not happening as much in the suburbs because many condominium and townhouse associations in the suburbs have "put the brakes on renting by changing their bylaws to prevent new owners from renting out their units," Radzin said. "They (association board members) know it is easier to get financing when you have a higher percentage of owner/occupants and they also know that property values tend to rise when owners occupy their units rather than renters."
Are you still seeing first-time buyers in the market?
"They are still out there, attracted by the low prices and low interest rates. But they generally need some education. They need to be shown they can actually afford to buy a home and pay less than they would if they were renting.
"You can still buy a nice condominium in the suburbs in the range of $50,000 to $60,000."
What are the biggest changes you have seen in the market in the last year?
The banks are loosening up a bit on their borrowing requirements, Radzin said. While you can still get a mortgage with only 3 percent to 5 percent down payment, you still have to have fairly good credit in order to qualify.
"In addition, I am seeing more and more buyers shopping on the Internet and through phone apps. That's good because it gets them actively involved in the process, but some of the (listing) sites aren't kept very up-to-date and accurate. So they call me and want to see a certain property and I have to tell them that it has already sold, but I can try to find them something similar.
"I am also seeing more companies start to transfer their employees again. It is apparent that people are feeling better about the economy."
What still needs to happen for the market to fully recover?
"Sellers need to understand that it is safe to come out and put their home on the market because prices are rising. They will once again be able to walk away with some equity, as long as they aren't underwater, and while they still may not get as much for their home as they once would have, they also won't pay as much for the new home they hope to buy.
"All of us in the real estate business feel this is the beginning of a really good real estate market. The bad weather has delayed it a bit, because people haven't wanted to venture outside. But we think this spring market will be outstanding."
Radzin has been working in the real estate business since she went to work selling new construction homes for Hoffman Homes in 1977. When the company was sold, she went on to work for the owners' new venture, Lakewood Homes, for many years.
During the recession, sales of new construction homes ground to a crawl so Radzin went to work for RE/MAX. She has been a broker at RE/MAX Suburban for 18 months.
For more information, call Radzin at (847) 951-5460 or email leslie@LeslieRadzin.com.