Further rebound anticipated in the 'burbs

The phones are ringing off the hook at Century 21 Langos and Christian in Mount Prospect.

“We had a great October through December in 2014 and we are expecting 2015 to be even better because the market is strong,” said Roseann Schumacher, broker and owner of Langos and Christian.

“Realtor.com is projecting that existing home sales will increase by 8 percent in the Chicago area in the coming year, compared to their projection of an increase between 5 and 7 percent nationwide,” she said. “They also expect that prices will increase 5 percent here, compared to a 3 or 4 percent increase nationally.

“Chicago's suburbs are still lagging behind the city, however, because all of the young people want to live down there. The builders know that so they are buying up old houses, tearing them down and selling the new ones for incredible prices. Homes that might sell for between $180,000 and $225,000 in the suburbs are selling for over $1 million in (Chicago neighborhood) Roscoe Village, for instance,” Schumacher said.

The phenomenon of suburbanites and those from Wisconsin and other nearby states buying a condo in the Loop or River North as a second home is also having an impact.

“They can spend periodic weekends enjoying the restaurants, theaters, sports venues and all that the city has to offer without staying in a hotel,” Schumacher said.

Do you see many first-time buyers taking part in the market?

“We are already getting phone calls from them this year and they are scrambling to do contracts on our listings.

“Once young people have a job, they want to buy a home and no longer live with Mom and Dad. We are finding that many of the younger ones are now willing to buy a fixer-upper if they can get it for the right price — especially those who can't afford to live downtown. I am talking about a home that needs paint, new carpet and a general décor update, not those that need walls knocked down or major structural changes. Instead, we sell those homes, primarily, to investors,” Schumacher said.

Do you see more movement in any specific sector of the market — i.e. single family, condominiums or townhouses?

“Single-family (houses) is what everyone in the suburbs wants. We have young families who no longer want to live in the city who are moving out here to get a house. They are also looking at the schools.

“We also see baby boomers who are used to single-family homes and want to continue to live in one, but they don't want to deal with a lot of stairs. So they are buying up the old ranches, which are often on large lots, and are making additions and reworking the old interiors,” she said.

The marketability of suburban condominium and townhouse communities have been hurt by association boards that have passed rules forbidding renters, Schumacher said. These regulations discourage potential buyers because they know their options are now limited and Realtors often advise against buying in communities with such rules.

“If they bought the condominium as an investment, they are often grandfathered for awhile but eventually they are faced with the choice of selling it (maybe at a loss) or moving into it. Potential buyers, on the other hand, know that if they want to move in the future, they will not have the option of retaining the property and using it for rental income so they purchase elsewhere,” she said.

Are distressed properties (foreclosures and short sales) still having an impact on the local market?

“They are still there and continue to affect all home sales because appraisers are still forced to include them in their valuation of homes that are being sold conventionally. This brings home prices down.”

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

“Sellers have gotten realistic and they are being more reasonable about price. They know that mortgage rates are at an all-time low and employment has increased, so now is a great time to sell. Therefore, they are listing their homes. According to the National Association of Realtors, we now have a five-month inventory of single-family homes, condominiums and townhouses on the market nationwide,” Schumacher stated.

Schumacher has been with Century 21 Langos and Christian for 25 years. Prior to that, she sold real estate for Red Carpet Realty. She can be reached at (847) 593-3460 or at Roseann.Schumacher@Century21.com.