Chicago Illinois Real Estate Blog and News

Here’s what you need to know about the latest statistics from 2021.

It’s hard to believe we’re already in 2022! Many people take the new year as an opportunity to reflect, and we want to do the same. We’ve pulled three important market statistics from 2021 so we can do year-over-year comparisons all the way back to 2018. 

The first stat we want to look at is the months’ supply of homes. This number measures inventory, and it refers to the number of months it would take for every home currently listed to sell. In 2018 we had 3.2 months’ supply of homes, in 2019 we had 3.2, in 2020 we had 2.1, and in 2021 we had 1.2. Keep in mind that six months of supply is considered a balanced market, so these numbers are crazy. We expect these numbers to climb slightly soon since people will be preparing their homes for the spring. 

We can see a big difference between our pre- and post-pandemic markets.

Next, let’s take a look at the average sales price. In 2018 it was $290,000, in 2019 it was $299,000, in 2020 it was $336,000, and in 2021 it was $366,000. Just like with months’ supply of homes, we can see a big difference between our pre-and post-pandemic markets. It will be interesting to see how much homes appreciate this year. 

The last statistic we want to talk about is the average days on market, and it measures how long it takes a property to sell. In 2018 it was 86 days, in 2019 it...

Can you believe we’re almost in 2022? The new year is just a few days away! We’re excited about 2022, and that’s why we wanted to talk a bit about what you can expect from us this coming year.

We’re going to be interviewing a couple of people we think you should know about, like Rae Kaplan from Kaplan Law Offices. If you have student loans or will be getting them in the next few years, you need to know about Rae. She can tell you how to protect yourself in the loan process, and she’ll talk about that a bit when we talk to her.

If you have any questions in the meantime, feel free to call, email, or text us. Have a great New Year’s, and I’ll see you in 2022!

Today I want to talk to you about a pretty important topic: your annual free credit report. 

With the amount of fraud and database breaches, this is something you need to take seriously. In case you didn’t know, you receive one free credit report from each of the three nationwide reporting agencies. It’s better to know you have an issue sooner rather than later, so I recommend you act fast. 

If you go to annualcreditreport.com and put in your information, you can receive all three credit reports. This is important for a couple of reasons: You can verify your information hasn’t been compromised, and you can be sure your score is accurate. 

If you are looking to purchase a home this year, my team can help you increase your score. Just give us a call or send us an email; we are always willing to help!

What’s happening in Chicago's real estate market? Let’s take a look at the numbers.

There were 17,412 homes for sale in the Chicagoland area this November. This is a bit lower than the 21,880 homes that were for sale in October. Our inventory numbers continue to shrink, and if you’re a buyer, you’re probably feeling it.

Meanwhile, we have around 1.5 months of inventory. In case you don’t know, inventory is a measure of how many months it would take to sell all of our inventory if no new homes came on the market. A six-month supply of inventory is considered a balanced market. This number is also down from October, where the months of supply was 1.9.

The average list price was around $373,667. This number has continued to fall, but it doesn’t mean we’re heading for a crash. Instead, sellers are just running into the realization that overpriced homes won’t sell, even in this market.

"If you are a seller, this is an amazing time to list your home."

The average time a home sits on the market is 47 days. This is...

One of the biggest concerns that sellers have in today’s market is how to go about buying and selling a home at the same time. Luckily, we do this all the time, so today we can help you manage both transactions.

Generally, the easiest way to go about it is to list your home for sale when you get a contract, after which, you can search for a new home. Then, we’ll help you close both houses on the same day; you’ll close the one you’re selling in the morning and the one you’re buying in the afternoon. All your possessions will be loaded on the moving truck the night before so that they can begin unloading at your new home as soon as you’re done closing.

This way, you won’t have to worry about where you’re going to live between transactions. If there does happen to be a larger gap between when you close on your old home and when you buy the new one, you may be able to get post-closing possession if you and your agent negotiate for it.

If you have any further questions or need assistance juggling two transactions at once, don’t hesitate to give us a call or send an email. We’d love to help you.

Let’s go over what happened in the real estate market here in the Chicagoland area over the month of October 2021.

The average sales price was $358,825. That’s a 1% decline from September, which was $361,165, and an even sharper drop from when the market peaked in June at $400,109. One year ago in October 2020, the average sales price was $344,879, showing that the average sales price has increased since last year.

In October 2021, the average original list price was $381,000. The market peaked back in February when the average was $441,000. One year ago, the average was $391,000, demonstrating that homes last month were listed for $10,000 less on average.

But how long were homes spending on the market? Between 2018 and 2020, the average ranged somewhere between 60 and 105 days, meaning that it would take an average of two to 3.5 months for a property to go under contract. The average market time as of last month was 42 days, so homes are selling faster.

"You’ll make more money from your sale than you would have a year ago."

...

Every holiday season, clients ask us if it’s still a good time to sell their homes. Most people know the market tends to slow down this time of year, so what should you do?

The truth is, it depends. There are a few key factors to keep in mind. First, we need to look at your home, and then we need to look at how it compares to the rest of the market. There are plenty of buyers out there, so if you have a great home, it can still sell for top dollar.

If you decide to sell your home, keep holiday decorations in mind. Make sure your home is undecorated when photographs are taken, but after that, decorations could be a positive. Some people love the cozy vibe that decorations give a home, so good holiday cheer could give you a leg up in the market.

"Whether or not to sell your homes during the holidays depends on a few things"

An issue you might run into if you’re looking to sell during the holidays is that some agents take a lot of time off during this time of the year. We understand wanting to relax during the season, but we are always available to help no matter what. Just give us a call or shoot us an email; we look forward to talking with you.

Selling a home that you’ve lived in for multiple decades can be very difficult. Sometimes, it’s the fear of not knowing where you’re going to move, not knowing what to do with all the possessions you’ve accumulated, or it could be the emotional fact that the house is tied to so many memories.

But sometimes people find that they need to move out of their long-term home. Here are a couple of the most common reasons why people come to this conclusion:

- They can no longer take care of the property. We’ve seen old properties with mold in them or holes in the roof. Severe issues like these are safety concerns.

- They need to downsize due to having too much stuff. This can often be challenging for people since their possessions are linked to memories. The reality is that some memories can be kept in our hearts and minds, as opposed to in material things, which can take up a lot of space. Having too much stuff in your home can also...

Today I want to give you an update on our market through the month of September.

Compared to March 2020, home sales in September were down 34%. This is a big reason for our crazy market. When there’s less inventory, more people fight over the few homes that are left. We only have a current supply of two months, which means it should take less than two months to sell your home. If it has been on the market for longer than that, it’s probably time to consider a change in price.

Meanwhile, the number of homes under contract is down 18% from our peak in May of 2021. But since that was the peak, don’t look back at it to figure out how to price your home. For example, people are on average receiving 98% of their list price. Back in June, people were receiving on average 100% of what they asked for.

"Take advantage of our great market while you still can."

Here’s the big one: In the Chicagoland market, the current average sales price is $361,700. Back in June, it was $400,000. This means pricing has gone down 10% in the last few months.

What does this...

Have you noticed a ton of people moving recently? Why is that? Today I want to go over the factors in our market that cause people to move:

1. Low interest rates. Even with rising prices, low interest rates make buying a home more affordable. Right now, interest rates are down from where they were in May of this year. They were already low in May, so buyers can afford to move into nicer homes.

2. People are leaving the state. Since the pandemic, more people have had the opportunity to work from home. This means people don’t need to stay in Illinois for their job, so they have the opportunity to move closer to family, head south for nicer weather, or leave because of high state taxes.

"Low interest rates make buying a home more affordable."

3. People are using this moment to downsize. Whether older people are moving into a smaller home or transitioning into an assisted living facility, a large chunk of the older population is using this opportunity to change their lifestyles.

“Should I do a pre-listing inspection?” That’s a question I often get asked. My advice is not to do it. I could put 10 inspectors in a house and get 10 different lists of things to repair.

"You don't want to waste time, energy, and money doing a pre-inspection."

The reality is that most buyers will do their own inspection. The pre-inspection is going to give you one list of around 10 items, and when the buyer comes in, they're going to pay to have another inspector who’ll give you a different list. If you had a pre-inspection list, you might be frustrated because now you’d have another list of items to repair.

I've had situations where inspectors have said that X needs to be fixed, then other inspectors come in and say that it doesn't. You need to be careful because you don't want to waste time, energy, and money doing a pre-listing inspection when the only inspection that matters is the one that the buyer is going to do. That's the one you need to deal with. However, if you have a major issue, chances are that you're going to have to fix it no matter...

If you’re considering buying a home within the next three to 12 months, have you thought about what needs to be done first? Here are my recommendations for what to do when preparing to purchase a property:

1. Talk to a lender. The reason you want to speak to them this early is that you need to confirm the status of your credit, what you can qualify for, and if debts need to be paid off before moving forward. The better your credit score and the less debt you have, the lower your interest rate will be. Your lender will tell you if there’s anything you need to do. For example, they may say that instead of putting so much money down on a house, it would be better if you paid off your car loan.

"Start doing your due diligence early—it can be fun!"

2. Drive around and look at different areas. Find out which areas you’re interested in purchasing in because you don’t want to begin your...

FHA financing can be a great way to make an offer on your dream home, but some sellers avoid offers that use it. To understand the issue, it’s helpful to think about it from the seller’s perspective. An FHA-backed offer comes with hurdles they can avoid by accepting a cash or conventional offer. Let’s go over the main problems.

With an FHA loan, an appraiser is required to inspect the property. If they find any issues, the seller is required to fix them before the mortgage lender can approve the loan. In contrast, cash or conventional buyers can accept the home without the fixes. They can even waive the appraisal upfront.

"Perception alone could stop sellers from choosing an FHA offer."

Another issue is the perception that FHA buyers don’t have extra funds in case the home doesn’t appraise at list price. This may not be the case, but the assumption alone could stop sellers from choosing an FHA offer. If you make an FHA offer and you do have extra funds, notify your agent so they can alleviate the seller’s fears.

But some homeowners don’t...

The term “as-is condition” has different connotations for different people. So when a seller calls and says they want to sell their home as is, I ask what that means to them.

Often, they want to list as is because they don’t want to update their property. That’s fine because we’ll consider that when deciding on a price. However, for some sellers, it means something like the furnace is out and they don’t want to repair it, but that’s something we’ll have to disclose. Some people think they can list their home as is and no one will ask for inspection repairs, but the issue is that as-is listings sometimes have negative connotations for buyers.

That means we need to be extremely careful when listing a house as is. The only time I advise it is when there are issues that won’t be handled. If it’s a cosmetic problem, the buyer understands that they’re buying it as they see it, like if you didn’t remove wallpaper or replace the carpet. However, if something major needs to be fixed, such as the roof, we need to disclose it. Sellers need to be smart about using the term “as is” when selling because it could turn buyers away.

...

Lately, we’ve had some sellers ask why they aren’t seeing multiple offers or getting as many showings as anticipated. Every property is unique, and some receive more activity than others. The more unique your property is, the less activity you may get. The real estate market has shifted over the past few months, so people aren’t getting as many offers as they were.

Staging or decluttering might help, and if your price isn’t appropriate, you won’t get multiple offers either. When you price correctly, you receive multiple offers that drive the price up, but if you price too high, you won’t get multiple offers—you may get one, then sell for less. Buyers are smart and will see that your home is overpriced and make an offer on another house; if you price too high, you’re helping someone else sell. We’re starting to see more inventory, so if your real estate agent is talking about reducing your property’s price, you want to listen to them and seriously consider it.

The market has slowed down in Illinois, and we’ll likely see a point here in July where it slows even more. Though we’re technically still in a seller’s...

We’ve been hearing for so long now that it’s a hot seller’s market, but if you’re in the industry, you likely felt the change around mid-May or at least the end of the month. I spoke with an appraiser the other day, and they felt the change too. If your home wasn’t on the market by May, you may have missed the peak, but that doesn’t mean it’s all over; it just means the intensity is slowing down some. Buyers are getting a bit more time to think, they aren’t having to make split-second decisions, and they aren’t competing with as many other buyers as they were.

Nationally, our median price is currently $350,000, but in the Chicagoland area and a little south of that, it’s $262,500. A lot is going on in our market; it’s still a wonderful time to jump into it. We likely have another month before the market changes again because we’re moving toward having the more typical market that we saw before the pandemic. 

If you have questions about our market or would like to know the median price in your area or town, I’d be glad to help you. Give me a call or send an email....

In this competitive home-buying market, we’re seeing certain issues come up after an offer is accepted. One of the main issues is low appraisals. When an appraised value is lower than the agreed-upon price, a decision needs to be made by both parties.

Buyers are crafting their offers to suit sellers who are nervous about the competition for their homes. We’re also seeing buyers forgo inspections and purchasing homes as is. They’re offering post-closing possession to sellers who are anxious about being able to find a new home quickly. This allows them to stay in their current home for a little longer while searching for their new home.

"Buying a property with structural issues will haunt you."

The one big concern I have with offers like this is if you choose to buy a property without an inspection. Even if you don’t plan on asking for repairs, it’s still important to have someone look at the house before you buy it. If you’re buying a property with structural issues, it's going to haunt you for years to come. There were situations back in 2007 and 2008 where this happened, and I don't want...

Back in April 2019, there were over 47,000 properties for sale on our MLS. In April 2020, we still had over 40,000 properties for sale. At the end of April 2021, however, there were under 20,000 properties for sale on the MLS. Inventory is down over 50% in just one year.

This market is being driven by this lack of inventory. Prices continue to rise as demand for homes remains high. When is this going to change?

"Take advantage of this extreme demand by selling now."

If I had a crystal ball, I’d tell you. However, we’re keeping a very close eye on things as we head toward the end of the foreclosure and eviction moratorium. I predict that we’ll see some more inventory hit the market at this point and things will get a little better for buyers. As inventory expands, the market will change.

If you’re a seller, this means that now is probably the best time for you to sell. Don't expect this market to last forever because...

A real estate attorney completes necessary tasks in every real estate transaction. They are going to order title, plan a survey, schedule well and septic inspections, and more. They charge a flat fee, usually around $500.

Sometimes there will be a postcard in the mail when you’re selling that advertises a real estate attorney for $199. You need to be careful about who you’re hiring. You want a real estate attorney, not somebody who is going to end up in court. The people who send these types of mailings usually aren’t true real estate attorneys, and they tend to cut corners.

"Your real estate attorney is there to protect you."

A true real estate attorney will maximize the money in your pocket. They can provide you with opportunities to save money on title, help the inspections to come out in a better place, and their knowledge of city/village requirements is paramount.

The most important thing is that your real estate attorney is there to protect you. Take this situation we had last week: Someone hired an attorney who spends time in court. The property did not close on time and is not closing, and the blame for...