We are in the midst of an "interesting" real estate market, as described by Mark Munro, a real estate broker with Baird and Warner in Barrington.
"There is a lot of good news, like the fact that prices of single-family homes are up about 9 percent over this time in 2013 and prices of attached homes are up about 19 percent over a year ago," Munro said.
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In addition, the average time a home stays on the market is shrinking. Single-family homes are on the market 15 percent fewer days this year before sale than they were last year, he said. Attached homes (townhouses and condominiums) are taking 29 percent fewer days to sell this year than they were last year, Munro added.
"But the number of sales we have seen are also down -- by 9 percent among single-family homes and by 6 percent in attached homes," Munro said.
That decrease has been caused by "a dramatic reduction in the number of distressed homes on the market -- short sales and foreclosures. They aren't gone, but their numbers are getting much better," he said.
Munro estimates that while three or four years ago between 30 and 40 percent of the inventory Realtors had to sell consisted of foreclosures and short sales, today that number has fallen to only 18 percent of houses and 25 percent of townhouses and condominiums.
"Those distressed homes are no longer negatively affecting the market anymore and that is true of the entire Chicago market," he said.
How does the local real estate market compare to the national market?
"Some markets, like Washington, D.C., weren't affected at all by the downturn and others, like Arizona and Nevada, were decimated. We got hit very hard here and we are still lagging in terms of price recovery, but we are improving."
Mortgage delinquencies are down, which is positive, Munro said, and suburban Chicago has a very low inventory of homes for sale, so if a home is nicely presented and correctly priced, buyers are lined up and ready to get into the bidding.
Luxury homes in the $1 million-plus price range, however, are still struggling, he said. The houses most in demand are those in the $200,000 to $300,000 range, said Munro, a member of Baird and Warner's top-selling Founder's Club. He is routinely listed among the 1,600-agent firm's top 3 percent of sellers.
Do you see more movement in any specific sector of the market, such as single-family, condominiums or townhouses?
All of them are selling now, with the attached homes recently catching up to single-family homes in terms of price appreciation and days on the market, he said.
"But in all sectors, sellers are still reluctant to sell if they don't need to sell for some specific reason. There has been some price improvement so the sellers are choosing to sit tight and wait for further price increases."
On the other end of the transaction, buyers are "bunched up and ready to buy but they are pickier than buyers used to be. They won't just take anything and decide to fix it up later. They want something that is already ready to go."
Which factors seem most important to your buyers?
"It seems that for most buyers, the quality of life is just as important as the quality of the home. So they want to live somewhere that is convenient to their jobs. They don't want to spend their lives on the highway. And they want locations that make sense for them, in terms of schools and other amenities."
What changes have you seen in the market in the last year?
The number of conventional sales has remained flat in the past year but the total number of sales has decreased, thanks to the reduction of foreclosures and short sales among the inventory, Munro said. At the height of the recession, there was roughly a 20-month supply of homes on the market and today that number is down to a three- or four-month supply, which is very low, he said.
In addition, number of first-time buyers who are shopping for a home has dropped. Normally, about 40 percent of buyers are first-time buyers. Now that number has fallen to 27 percent, Munro said.
What steps need to be taken for the real estate market to fully bounce back?
"We need to see job creation and wage improvement because the young people who we need to see entering the market are being held back by student debt and a lack of good jobs.
"Only if buyers feel good about their jobs and if they are not carrying a lot of debt will they consider buying real estate and we need those young people to become buyers in order to sustain growth in the market."
What is your approach to selling real estate?
"I sell primarily in the Northwest suburbs but I will also go as far as the North Shore and the Western suburbs. I will serve anyone who wants my holistic brand of real estate counsel."
Munro said he focuses on the proper preparation of the home, helping the owners decide what is worth improving before the home goes on the market and offering help to owners with staging and finding trades people to do specialized work.
Next, he works to help the homeowner select a listing price that is fair, but also won't leave money on the table.
Finally, he heavily markets the home to target buyers through known databases, print media and other avenues. He puts a strong emphasis on professional-quality photos of the property, which he feels are key to interesting potential buyers and eventually selling the house.
This method has translated to Munro boasting of an average of only 25 days on the market this year compared to the average among all agents of 113 days. In addition, his sellers generally enjoy a much higher sale-price to list-price ratio than the norm.
"I know that if I keep product preparation, price and marketing in sync, I will be able to produce a much higher return in a reasonable amount of time for my sellers. And when I am representing a buyer, I do my best to protect their interests by pointing out problems that they might not see because they are wrapped up in the emotion of buying a house."
Munro can be reached at (847) 382-6355 or at www.markmunro.net.