Suburban housing market rebounds nicely

The Northwest suburban real estate market has regained between 60 percent and 70 percent of the value it lost during the Great Recession years of 2006-2012, rebounding strongly since 2013, said Mary Zander, real estate broker and co-owner of Picket Fence Realty in Mount Prospect.

"The market has recovered much more quickly than any of us expected, but fortunately it is not venturing back into bubble territory," she said.

"Depending on a home's location and updates, we are also seeing multiple offers. During 2016 we at Picket Fence saw multiple offers in 30 percent of our deals," Zander said. "But in most cases those receiving multiple offers had updated homes in great locations. Today's younger people aren't generally as willing to make major renovations to an outdated home as earlier generations were."

Prices on homes at the low end of the single-family market have particularly increased. A few years ago, in 2013 and 2014, those homes started between $200,000 and $225,000, Zander said. Today, a starter home in the suburbs costs between $250,000 and $275,000.

Most popular with today's buyers are inexpensive single-family homes, followed by condominiums and townhouses in areas along a Metra train line. Sales of medium-priced homes have also been brisk. High-end homes costing more than $600,000 have been slowest to recover but they have sold better in communities that are well-known for having high-end homes. These homes currently have the longest market time.

"First-time buyers are anxious to enter the market now, but our problem is that there has not been enough inventory of lower-priced single-family homes to meet the need," Zander said.

"Today first-time buyers don't need to put down the traditional 20 percent. With an FHA loan they only need a 3.5 percent down payment and even with a conventional loan, they only need to put down 5 percent. The problem for most, however, is that they truly have to have a wonderful income in order to support those monthly payments."

Zander said that over the past five years her agency has experienced a big change among first-time buyers. Today these buyers are especially concerned with school districts, even if they don't yet have any children. They are well-versed on school district rankings and individual school report cards before they even talk to a Realtor. And if they have decided they want a certain town or a certain school district, in most cases they are willing to sit back and wait for a house to come on the market that is in the right location rather than buying somewhere else instead.

"And once they have moved out from the city, for instance, and gotten established in a town or school district, they generally want to move up within the same town or district," she said. "They get used to their park districts, town, schools and even doctors - and they don't want to leave."

Another big change Zander has seen is that homebuyers who have been renting for seven years because they experienced a short sale or a foreclosure on a previous house, are now able to get back in the market and that is helping sales.

The number of short sales and foreclosures that are still on the market is so low that they are no longer having a negative effect on home prices, which is another big change over several years ago. Their disappearance from the scene has been part of the reason homes have appreciated so well lately. It is also why so many homes are selling.

"The number of homes sold in 2016 in Mount Prospect, for example, surpassed even the large number that sold in 2015. In fact, we have not seen this many homes sold in Mount Prospect in one year since 1998," she said.

"I think that the sales we are seeing in the Northwest suburbs are even higher than those discussed in the national media," Zander added.

The fact that layoffs are no longer as frequently in the local news, combined with companies offering their new employees relocation packages again for the first time in years, are factors making real estate a hot commodity once again.

"I think we have finally reached the point in the market that all of us could only dream about during the recession," she said. "Interest rates are still low. People are buying again and since we have no more land for building, prices on existing homes are appreciating. All we need now is inventory and I am sure people will be listing their homes this spring."

Zander and her husband and business partner, Tom Zander, have been in the real estate business since 1990. They worked for two major real estate companies before partnering in 2001 with Paul and Sue Duchek of Arlington Heights to open a second location of Picket Fence Realty.

"At Picket Fence we realize the importance of having a local realty office that knows what is going on in the community and that conveys a hometown feeling. Those big colorful television ads provided by the national companies didn't matter. It is all about hiring local people who live, work and shop in a community," she said.

Picket Fence Realty is located at 400 W. Central Road, Mount Prospect.