Industry Insider: Bob and Lisa Wisdom, RE/MAX Horizon

Higher than normal temperatures and historically low interest rates helped sell houses this winter, a time when home sales are typically slow, a local real estate professional said.

The Chicago area housing market is finally stabilizing with inventory starting to decrease, said Bob Wisdom, who sells real estate with his wife, Lisa, at RE/MAX Horizon in Elgin.

“We have been very busy since January because interest rates have remained low and the weather has been so mild,” Wisdom said. “We have been seeing investors jumping in and also people buying who are looking at the bigger picture and realizing that they may take a hit on their current house, but that they are getting the same break on the bigger house they are considering buying.

“They know they will never again be able to get so much house for so little money,” he said.

Wisdom said buyers and sellers are experiencing fewer problems with low appraisals blocking sales. With the number of foreclosed houses decreasing, those depressed values are having less of an effect on appraisals, he said.

“But the real estate market is still very sensitive,” Wisdom said. “It is the external factors that scare me now. For instance, if gas gets to $5 per gallon, people will pull back again or, at the least, they will be more careful to buy a house close to work.”

While global events can push everyone here back into their shells, presidential elections, on the other hand, historically have a positive effect on the housing market, he said.

Wisdom should know. He and Lisa have been selling real estate in the Kane and McHenry counties for 22 years.

How does the Chicago-area housing market compare to the national market?

“I think that Illinois is doing a little worse than the national market. Sales have been good lately, but selling prices are down because most of the houses that have been selling are distressed and that skews the prices on the traditional sales.”

Wisdom said sales always vary from state to state and city to city.

How do sales currently differ between single-family and multifamily units?

Early in the housing crisis, townhouses were selling better than single-family homes because people were looking for bargains, Wisdom said. That has now reversed and single-family homes are selling better than townhouses because prices on houses have decreased and are now competitive with multifamily units, so buyers are gravitating toward the larger properties.

In addition, many first-time buyers who bought multifamily units in the recent past have been unable to amass any equity. They are now having to stay where they are and not move up, he said.

How is the market in Chicago?

“I hear from other agents that Chicago is pretty active now and prices are stabilizing. They were never hit as bad as the suburbs were because so many young people want to live there.”

Are first-time buyers with no home to sell taking advantage of the low prices and interest rates?

“First-time buyers are finally getting off the fence and buying if they can, because they are realizing they will never be able to get such a good deal again. Today they can buy a house or townhouse for less than they are paying in rent.”

Wisdom said move-up buyers are also choosing to buy larger homes at a bargain, sometimes even renting out their current home while they look for a buyer.

What needs to happen for the residential real estate market in this area to permanently recover?

“The banks need to loosen their credit terms slightly so that more people are able to get out there and purchase homes. As the demand goes up, the supply and prices will go up. That will help clear out the backlog of short sales and foreclosures, which are still hurting everyone else’s appraisals by drawing down everyone’s value and the entire market.

“If the majority of listed homes in a particular area are short sales or foreclosures, an appraiser has no choice but to include some of them in his market comparisons, and that brings an entire market’s prices down.

“We also need more jobs and a stronger economy so that people feel more confident about making a big investment like a house.”

Bob and Lisa Wisdom can be reached at www.teamwisdomrealestate.com or (847) 695-8348.