Jul

30

The Chicago Residential Market - A Mid-Year Review

Filed Under Real Estate |

I set up this blog back in February and had every intention of launching it right away with regular postings. Work, however, got in the way.

My team and I have been busy - very busy - marketing and selling homes. Contrary to the blanket reports of doom and gloom from the media, there are bright spots in the market. I don’t deny that there are parts of this country where real estate values have fallen dramatically and foreclosure rates have skyrocketed, but Chicago is not one of those markets.

Chicago is a city of neighborhoods, and home values in many of those neighborhoods are stable. I sell primarily in Chicago’s North Side in neighborhoods like Lincoln Park, Lakeview and the Gold Coast. These established communities have a healthy balance of older and newer homes, a mix of property types, and an infrastructure to support the diverse needs of the community. They bear no resemblance to the “boomtown” developments across the country that were seemingly springing up overnight during the height of the real estate bubble.

Such neighborhoods are now featured in pieces like the 60 Minutes story on foreclosures earlier this year - Chicago neighborhoods are not.

Even if the full brunt of the housing downturn has missed Chicago, the softening market has placed a greater importance on the art and science of home selling. During the boom time of the 90s, anyone could sell a home - and just about everyone did. The do-it-yourself, “for sale by owner” seller was king. Today, that’s no longer the case.

There is no substitute for seasoned experience and a high level of expertise. In fact, in this market, it’s essential. My team and I have found that there are three strategies that are critical to selling in this market.

Spot-on pricing. Not long ago, there was little harm in setting an above market asking price, but realistic pricing is absolutely crucial today. With home prices in Chicago flat to slightly down, an over-priced house is not likely float to the top of a buyer’s short list. Worse, by the time a price change is made and a deal is finally struck, a home will have fetched less than it would have otherwise. Time is no longer the seller’s friend, and that is why I spend considerable effort appraising the homes I list, performing comparable market analysis, and advising my clients on pricing strategy. This helps ensure that when we list a home, the price will be spot-on and the market will not pass my sellers by.

Perfect showing condition. There are thousands of creative, visionary people in the world. Unfortunately, not all of them are engaged in buying a home. This means that while some folks can see beyond the clutter and wear-and-tear of the average home, most cannot. Even if a home has excellent potential, many buyers will not look for it and will instead move on to a “prettier” home. Because of this, I feel strongly that the homes I list “show like models,” and work with clients to meticulously stage their homes before placing them on the market. Even as they are being shown, my team and I closely monitor the feedback from buyer showings and open houses. If we repeatedly hear “we like the house but not the carpet,” we’ll recommend a fix. With hurdles like these removed the offers flow much more freely.

Comprehensive marketing. Perfect home buyers are out there, but there are more homes than ever competing for their attention. What’s needed to rise above the fray is comprehensive marketing, and that’s why I have several professional marketing specialists on my team. This allows us to produce beautiful, in-house marketing materials for each of our listings and syndicate them to dozens of venues. For every home we list, we create long exposure SLR photography with a wide angle lens, 360-degree virtual tours, custom floor plans, color brochures, and interactive neighborhood amenity maps. We then publish these materials to over 30 top real estate websites as well as several local and national newspapers and trade journals. And yet, many agents still limit themselves to the kind of point-and-shoot photography that yields dimly lit rooms and overblown windows. This shows homes in a terrible light, and leads buyers to pass them over. By comparison, the only thing our prospects can’t do from their desktops is feel the drapery and flush the toilets in our homes - and should technology permit, we’ll implement those features as well. So far, it’s made all the difference us.

And what is that difference?

In the first half of this year, my team received 55 written offers to purchase 38 properties, including multiple offers on 12 of our listings. Our negotiations resulted in 30 sales of condos, coops and single-family homes with listing prices ranging from $300,000 to $4.5 million. Three sales subsequently fell through, but between our listings and our buyers, my team and I successfully negotiated $52+ million in sales in only six months.

This is not to say that everything we list sells (it doesn’t), but contrary to the gloomy headlines, the real estate world is still mostly sunny for our team-and by extension-the clients who list with us.


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