Variations seen in home, condo sales

"We are having a pretty good year in real estate in the Northwest suburbs. Numbers are up year-over-year. In fact, we are back to 2013 levels, which were good," said Mark Munro, a real estate broker with Baird and Warner in Barrington.

Sales of single-family homes are up 15 percent while sales of condominiums and townhouses are up 3 percent over 2014. But prices are basically reversed from the units sold figures on those types of housing options. Prices have only risen 5 percent this year for single-family homes while prices for condominiums and townhouses are up 14 percent over last year, Munro said.

"It is a curious phenomenon the way prices among attached units are up so much, but they took a big hit during the recession, so I have to think they are just finally recovering from the depths to which they had sunk," he said.

The days on the market figure for single-family homes has also increased 8 percent but decreased by 5 percent for townhouses and condominiums. But, Munro cautions, that number is very individual and depends on the price and condition of the individual property.

"Nevertheless, the news for sellers continues to be good. We only have a three- to four-month inventory of homes currently on the market and we consider a six-month supply to be our equilibrium rate. Compare this, for instance, to the supply during the depths of the recession. Then we had a 20-month supply of homes on the market. So this is a really good market for selling," he said.

Are short sales and foreclosures still having an effect on the Northwest suburban real estate market?

"They are becoming less and less of an issue versus, for instance, six years ago. But they are still more of an issue than they were pre-recession. Foreclosures and short sales are still affecting appraisals, too, but not as much as before."

What is happening with regard to appraisals?

"It has been difficult to get the appraisals to keep up with the appreciation we have been seeing in the market, simply because the appraisers are obviously looking at older data. The Realtors have to be careful to give them comparables that support their (clients') sale price and that has been helping them become more in tune with appreciation in the marketplace."

Munro said, however, that the mortgage loan process is still tedious and the new lending disclosure rules that went into effect this month - Truth in Lending-Real Estate Settlement Procedures Act Integrated Disclosure (TRID) - are expected to lengthen closing times and to dramatically effect how real estate contracts are written. The purpose of the new rules is to make sure borrowers better understand the rules and implications of borrowing.

Munro expects the minimum closing time to become 45 to 60 days, thanks to the new procedures that have gone into place. Speedy closings will be much rarer for anyone who needs a mortgage, which is 90 percent of buyers.

Are first-time buyers a factor in today's market?

"In order to fuel a full recovery in the real estate market, we need to get millennials to get more active in the purchasing of real estate. Too many of them are still renting or living with their parents.

"But they are doing that because they can't get enough income flowing to move into a condominium or a townhouse. Jobs and income need to rise in order for the young to get started. And even when they have a job, they are afraid that they might lose it in the next round of layoffs, or they might be required to move for their job. All of that has a psychological impact and prevents them from putting down roots."

What still needs to happen for the real estate market to fully recover?

"We need to see a growth in income and jobs so that young buyers feel comfortable about coming into the marketplace. Without job and income growth in Illinois, the real estate market will not improve."

Munro can be reached at (847) 382-6355 or visit www.markmunro.net.