A 'shocking' lack of houses for sale is frustrating suburban buyers

Two years into the COVID-19 pandemic, Realtors across the suburbs tell the same story: There's a shockingly low number of single-family homes on the market, which is frustrating a larger number of buyers who either want their first home or a bigger one.

“In a balanced and healthy market, we would have a four- to six-month supply of available homes and neither buyers nor sellers would have the upper hand,” said Jim Barcelona, vice president of brokerage services for @properties.

But right now in Naperville, for example, there's less than a month's supply, Barcelona said. “We have tremendous buyer demand chasing very few available homes, so prices are really rising.”

Jim Regan, an agent for REMAX Suburban in Mount Prospect, said today's market is not like anything he's ever seen — and he started in 1973.

“There are so few homes on the market that pretty much every seller of a clean, updated home can now expect multiple offers and will probably get as much as $20,000 over asking price,” Regan said.

The far Western suburbs, where open land still abounds, isn't faring any better. Lynn Klein, broker/owner of Century 21 New Heritage with offices in Hampshire, West Dundee, Marengo and Huntley, is also seeing an abundance of buyers seeking homes and not finding much selection.

“Millennials are now ready to get out of their parents' homes, but they can't find anything to buy,” she said. “New construction would have once helped move the market, but that has been quite slow because only the big players — who believe it is cheaper to build traditional two-story homes — have been able to get building materials. And most older buyers are looking for ranch homes and homes with first-floor master suites.”

Klein is telling prospective buyers to sign up with a Realtor so they get on the list to see houses that meet their requirements.

“One of my agents recently had a home that had 100 showings in three days and then got 17 offers,” she said.

Regan said many of his sellers are traditional down-sizers who want to leave their large homes.

“But right now, these people's psychological energy is focused on getting through this (COVID-19) health challenge,” he said. “They want to stay put until things return to normal. So right now, I am mainly working with adult children who are selling their parents' home because they passed away or had to move into assisted living.

“And younger people are having to put up with crowded conditions because they can't find a larger home to buy,” he said.

In pre-pandemic January 2020, Regan's office had about 60 homes come on the market in Mount Prospect.

“In January 2021 it dropped to 33, and this January it was 29,” he said.

Klein, however, said in her area COVID-19 is no longer the main reason for hesitation. Now, she said, people are afraid of winding up homeless and don't want to list until they know they can buy something else.

Barcelona said sellers should still give their home the traditional spruce-up.

“Don't think that you don't have to clean up, repair and repaint your home,” he advises. “You still do.”

Barcelona said the wise seller won't wait until the grass is green and their flowers are blooming to get on the market. “If you don't want to close until after school is out, you have the leverage to say that to your buyer,” he said.

Buyers, meanwhile, need to have a strong preapproval letter from their lender ready and be prepared to make an immediate offer on a home they like, Barcelona said. “Don't lowball,” he advised.

Even so, he added: “Be prepared to be disappointed. If you keep fishing, you will eventually land one.”

Before they make an offer, buyers should consult with an agent and understand the average market time and the ratio of list price to sale price. There are other things they can offer, like allowing the seller to rent back from you for a time — or even letting them stay rent free.

Barcelona said the real estate market went into “insane” mode in the fall of 2020 and hasn't stopped.

“World events will eventually change things — like the stock market, interest rates or the Russia-Ukraine conflict,” he said. “But it could take three months or three years. Who knows?”