Real estate recovery stronger near city

The current state of the real estate market depends, as the old saying goes, on where you sit and the cards you hold.

"We are in an increasing market, overall," said Bob Wisdom of RE/MAX Horizon in Elgin, who works in partnership with his wife, Lisa. "But it truly depends on where your property is located. For instance, Chicago properties are on fire - they are so hot. But in the suburbs, it depends on the suburb. Some are taking longer to recover than others."

As always, location is a major factor.

"Generally speaking, the closer you get to the city, the faster the homes are selling and the higher the prices are going," Wisdom said. "In the further-out suburbs, prices are rising more gradually and the homes are selling more slowly."

The first-time buyer market is driving hard, however, in places where homes can be purchased for $200,000 or less. Wisdom is seeing that in Elgin, for example, where you can buy two- and three-bedroom homes in that price range that were built in the 1980s or earlier.

Investors have also been active in this lower end of the market. But those seeking to buy and rent out homes for profit, or to fix up a home quickly and resell it for a profit, are having more of a challenge now that home prices are rising and inventory is falling.

We asked the Wisdom more about the current real estate market.

What changes have you seen in the market over the last year?

"The inventory level has settled down. We have seen lots of people jumping into the market. Lisa and I listed 40 homes during the month of April alone. But they are snapped up quickly, so the market inventory remains low.

"Homes are selling quickly if they are priced correctly and there are often multiple offers coming in on those houses. The days of buyers being able to come in with a lowball offer are gone and buyers also don't have the luxury of taking weeks to think about a property. By the time they are done thinking, the home will be sold."

Interestingly, Wisdom said houses at the low end of the price spectrum are selling quickly to first-time buyers and investors and luxury homes are also very hot. The softness, currently, is in the middle of the market.

Are you seeing more movement in any particular segments of the market?

"Townhouses and condominiums are in demand again. There has been a full reversal from the days not that long ago when everyone wanted to buy a single-family home. The homeowners associations that don't allow owners to rent their units are still causing some problems but not as many as before."

What other trends are you observing?

"Many older buyers who have been waiting to downsize are now doing it. A surprising number are leaving the state. Illinois is a tough state to retire in, thanks to its financial situation, and they also want to get away from the bad winters."

What still needs to happen for the market to completely rebound?

"Interest rates need to remain steady and then the banks need to become more reasonable on giving loans by no longer including distressed properties in their appraisals. We have many instances where the buyers are willing to pay a particular price, but that price won't appraise out for their mortgage.

"The appraisers need to find at least three comparable homes within a few miles that have sold in the last six months and if they can't find enough conventional sales, they have to include short sales and foreclosures. That is keeping the prices down."

Bob and Lisa Wisdom have been selling real estate for 23 years. They rank among REMAX's top 20 agents in northern Illinois. Call (847) 695-8348 to reach them or visit www.teamwisdomrealestate.com.