Far West suburbs appeal to certain buyers

The real estate market in the Fox Valley has been gradually improving across the board since 2010, said Brian Knott, an agent with RE/MAX Horizon in Elgin.

"We are seeing everyone - first-time buyers, move-up buyers and down-sizers - looking to make a move. Sellers are realizing they can do better now than they could when there was a deluge of short sales and foreclosures," he said.

"Many are seeing their neighbors selling their homes and are deciding that even if they are going to lose money, there is good activity out there and now is the time to bite the bullet and move forward with their lives," Knott said.

"They are understanding that they have gotten years of enjoyment out of their homes and that counts for something, too."

The value sellers may have lost is essentially payment for those good times.

The uptick in sales is happening with single-family homes, townhouses and condominiums alike.

"People are shopping for whatever they can afford. In fact, the values on low- to midpriced properties are actually rising more quickly than the values on luxury homes - and that trend is true nationwide," Knott said.

"I know sales are going gangbusters in Arizona and California, but Chicago is probably on a par with the rest of the country.

"This pocket of the Fox Valley is home to lots of hardworking people who need good housing," Knott said. "Resistance to high property taxes is holding up some buyers, but there really has been movement across all prices ranges. I have even seen some luxury homes selling now - ones that have been sitting on the market for awhile. If you get a good listing that is priced right, it will sell in this market."

Who is buying?

"We are seeing lots of young people and retirees coming out this direction because they know they can get more for their money here. We are also seeing people who already know and live in this area wanting to move up or down, or closer to work.

"Interestingly, we are seeing an increasing number of Realtors from further east bringing their clients out here to buy our houses. A Realtor from Arlington Heights recently sold one of my listings in Hampshire, for example."

What is the biggest change you have seen in the market?

"Appraisers are getting tougher in their home appraisals for the banks. I have never had to contest more appraisals than I have recently.

"Appraisers' work is being highly scrutinized (by lenders), so it seems they are afraid to appraise for a fair value. I have had several instances where the appraiser has picked the closest comparable home sale, not the most appropriate comparable within a reasonable distance, and it has ruined the sale.

"All of the Realtors are having to go back and double check the appraisers' work and then file 'reconsideration of value' reports to appeal. Sometimes we have to ask for another appraiser because the first appraiser doesn't want to admit a mistake, and if you don't get that appraisal changed, it stands for six months. During that time you can only get a good price from conventional buyers who don't need FHA financing. That cuts out half your potential pool of buyers.

"In a way, this appraisal problem is a good thing because the appraisers can't arbitrarily change an appraisal and OK a bad deal. In addition, Realtors are no longer permitted to talk directly to an appraiser. But it adds to every Realtor's workload to do all of these appeals, looking for errors in square footage or numbers of bedrooms and bathrooms, and also submitting the comparables we used in coming up with the listing price."

Are foreclosures and short sales still a factor?

"They are still out there. In fact, I closed on a short sale last week and had two calls about listing short sales, too. One was an 'interest only' loan from 2005 and the owners realize they need to do something because the principal is coming due.

"There were also seven pages of judicial sales - foreclosures - in the most recent Kane County Sheriff's Department property sales listing."

Though foreclosures and short sales are still out there, they are decreasing, Knott said.

What do you expect in the near future?

"The interest-only and 5-percent loans that were given out in the early 2000s because people wanted to sell as many homes as possible - they were our undoing. There was irrational exuberance in the housing market back then.

"Changes have been made and I have faith it will all work out. We are moving in a healthy direction now."

Knott can be reached at (847) 269-9870 or through his website at www.brianknott.illinoisproperty.com.