Real Estate Good News, Bad News

By: Maria Girlie Pascual

 

Last February, this year 2021, In our state of Illinois, statewide median home prices were $226,983, up by a whopping 14.1 percent from $198,900 from February of last year, 2020. This includes all the cities in our fair state, and all the counties it encompasses. But for the Chicago Metro Area alone, the median home sale price in February, 2021 was $270,000, an increase of 12.5 percent from $240,000 back in February last year. This includes the counties of Cook, Kane, Lake, Du Page, Will, Kendall, Dekalb, Grundy and McHenry. This upward trend is a direct result of low mortgage rates of under 3 percent for a 30-year home mortgage, and the short supply of houses for the hungry homebuyers that are now engaging in bidding wars just to land their dream home.

The good news is, the COVID situation did not harm the Illinois real estate market. In fact, it contributed to its upward trend with more homes sold last year totaling 172,394 units, up by 9.6 percent from a 2019 count of 157,268 units sold. The bad news is, in the Chicago Metro area which comprises the aforementioned 9 counties, the number of homes sold in 2020 rose by 8.8 percent, the highest number of units sold since 2012. The bad news is, the months supply of inventory for 2020 in the metro area was a drastic 45.5 percent average, making it a sellers market where demand has exceeded supply, a trend that has continued down to the Spring Market of 2021.

What does this mean for buyers and sellers? As a real estate professional for the last 35 years, my advice is “Listen to your Realtor!”. How many times have I gone out with first-time, even seasoned, move-up homebuyers who were hesitant to bid a bit higher than list price on a property they wanted and they refused to listen to my suggestion on either coming in with full price, or to add a thousand or two to the asking price, and have lost the bid outright because there were others that came in stronger? After they realized that it was indeed a “dog-eat-dog” market right now, they cooperated and bid higher, and were able to get the home of their choice above the others.

As for the sellers, it’s not only the interest rates that are fueling the housing frenzy. The houses that sell fast and attract the highest bidders are the ones that have been either well- maintained and updated,, or have been completely remodeled and cleaned prior to selling. With the pandemic still on everyone’s minds, the less the new homeowners have to worry about remodeling or fixing up things, the more motivated they are to obtain the worry-free home that has been taken care of by the previous owners at a price that’s a win-win for both parties.

Some tips for the buyers: Get pre-approved before anything else. It’s all about lining up the financing, especially in this super-competitive market. Some might say, “I don’t want to get into a bidding war, I’ll just wait.” You know how much waiting will cost you, the buyer? On a $500,000 mortgage or loan at an interest rate of 2.5% versus the same amount of mortgage at just a point up at 3.5 %, the monthly difference in payments on a 30- year fixed amortization is $276 a month, almost $300 with just a difference of 1 point separating the two rates, $2,245 a month on 3.5 % or $1,976 at 2.5%. Wow..that sure is worth fighting for, isn’t it? That’s why the buyers have come out in full force. Also, with a lot of companies supporting “Work from home” models while the country is trying get vaccinated, most homeowners are expanding their nests to accommodate home offices, extra recreational spaces and spaces for returning adult children.

Tips for the sellers: Make your house pop! What that translates into is spending money the right way in order to attract the highest offers. These quick changes to your home include painting to freshen up the home, changing old appliances, doing renovation to be competitive, especially with kitchens and baths. These are the areas that bring in the most return for your remodeling budget. It does not have to be a big, long term project. It should make the house look modern, well kept, and clean. Like we always say, the cleanest homes sell fastest. Also, do some maintenance inspections and repairs to the major components of the home which are the furnace, the air conditioner, the roof and the hot water heater. Individually, these items don’t have to break the bank, but if these have not been taken care of and maintained properly with parts replacement to prolong the life and service of the mechanicals, the home inspection may reveal deficiencies that the seller may have to give a cash credit for, if they wanted the house sold. If these routine maintenance items are taken care of before putting the home up for sale, it will cost less now than after the home inspection.

So buyers and sellers, call a professional real estate broker to help you navigate this very active, very competitive market. With the right Realtor, you will be able to get sound and proven advice to make sure you achieve your goals. Trust the expert, and make sure they have been around long enough to get you the best deal in this market. It pays to get a good, solid professional working for you, with your best interests at heart. Happy House Hunting!

For a no-obligation market analysis or consultation, whether you are buying or selling, call or text me 24/7. Put my 35 years in real estate and millions of closed sales to work for you—ask these happy buyers how much they love their new homes! Thank you to all my clients, both buyers and sellers, who have made me one of the Top Five Brokers with Realty Executives for three years in a row! MARAMING SALAMAT PO!

New homeowners Zach with mom Cora Quirante – congratulations!

The beautiful 10,000 sq foot golf course home of Don Antonio Garcia and family – Congratulations and welcome to Chicago !

New Barrington residents Antonio Sr and Anthony Garcia, Jr. and daughter Bailey and new friends James, broker Girlie, Salvy and Elizabeth