Vrushank and Pooja Joshi just moved to Buffalo Grove and they plan to stay put.
The couple — he’s a computer systems administrator and she’s a physical therapist — looked for months for a house that was affordable, big enough to accommodate a growing family and near schools with the level of quality they envisioned for their toddler daughter and future children.
“We could have gone further north and gotten a bigger yard, but communities with newer houses — well, the schools are newer too,” says Vrushank Joshi, 39. Buffalo Grove’s established schools, convenient location and community — the pair have a circle of friends in the area — put a bull’s-eye on the northwest suburb. At the end of June, the Joshis moved into a four-bedroom, 45-year-old house that cost $395,000 and is livable for now, though they may update the space down the road.
The Joshis are part of the wave of homebuyers who took part in the recently concluded spring homebuying season. Here’s a glimpse of how the Chicago-area market’s behaving, from sale prices to supply.
In the nine-county Chicago metro area, the median sale price is up 4.3 percent in 2018 to $242,500, according to Illinois Realtors, the state’s largest trade association of agents and brokers. And houses are selling faster: Houses now take about 47 days to sell, down from 53 days last year. In the city of Chicago, the median sale price rose 4.9 percent to $299,000, and houses are selling in about 44 days, down slightly from 46 days last year.
Still, sales figures could have been better, if more houses had been available. The total number of sales this year dropped 2.9 percent in the larger metro area and 3.1 percent in the city of Chicago.
Analysts and agents say that while sellers have given up on timing the market perfectly, today’s strong market has many sellers thinking they have plenty of time to hold on to their property and sell at a desirable price. In addition, sellers may hold off because they are debating the logistics of selling and then being unable to buy quickly and move to their next house.
Also, supply for the smallest units — studios and one-bedroom condos — is tightening as some owners simply save up the down payment for their next place and then rent their first place, says Alex Haried, an agent with online realty firm Redfin’s Chicago office.
“Fees for selling are prohibitive sometimes,” says Haried. “If you’re looking at paying 5 percent to 6 percent commission, that’s onerous, especially if you only bought a few years ago. These buyers have gotten a few promotions and can save the down payment for the bigger place without counting on equity from the first place.”
That said, generational turnover is accelerating, as the oldest baby boomers finally relinquish their houses, says Joel Raynes, a Wilmette-based realty agent who is president-elect of the North Shore-Barrington Association of Realtors. “People who’ve lived in their houses forever are now selling,” he says. That translates to a bumper crop of split-levels and ranch houses that are easily renovated to the open-concept layouts popular with young families.
Many first-time buyers share the Joshis’ perspective that it’s smarter to find the right house to grow into than to get a toehold in the market with a starter house, only to see much of that early equity sapped by transaction costs a few years later when moving up to a larger house.
“When we started looking, I had in mind a starter house, but it was so exhausting to look that we thought, no, one and done,” says Vrushank Joshi.
Speaking of exhausting, bargain hunters seeking an investment property must search far and wide for properties worth spiffing up for a quick resale or to rent. “Investors were out in full force the last few years, and in smaller communities, they’ve snapped up a lot of what they could,” says John Lawrence, owner of Weichert Realtors Nickel Group, which operates in the near western suburbs of Oak Park and River Forest. “It’s great that they’ve improved many functionally obsolete homes, but there are only so many of them.”
Which Chicago neighborhoods, suburbs are hot?
Certain factors predict whether neighborhoods heat up or cool down, experts say. For instance, hot areas tend to offer family homes that are move-in ready, walkable access to neighborhood amenities, public transit for errands as well as commuting, and trees and natural features that are integrated into the neighborhood.
Not-so-hot neighborhoods tend to have had previously high turnover that’s running out of steam, be difficult to access or include large homes whose use is tightly restricted by zoning or homeowners’ associations (for instance, community associations restrict short-term rentals).
Zillow reports that for the Chicago metropolitan area, the current median home value is $218,00, a 5.5 percent increase in the past year.
Based on home value increases alone, Zillow reports that these are the 10 hottest neighborhoods in Chicago, based on median homes values between May 2017 and May 2018.
1. Bronzeville home values up 20.3 percent to median home value of $204,100.
2. Mayfair home values up 16.3 percent to median value of $327,600.
3. Burnside home values up 16 percent to $125,700.
4. Woodlawn home values up 15.9 percent to $121,600.
5. Tri-Taylor home values up 15.9 percent to $222,200.
6. Chinatown home values up 15.4 percent to $277,900.
7. Georgetown home values up 15.3 percent to $192,400.
8. Belmont Gardens home values up 13.2 percent to $254,000.
9. Harbor Side home values up 13.2 percent to $114,800.
10. North Austin home values up 13.1 percent to $179,900.
According to May 2018 data from the Mainstreet Organizaton of Realtors, whose agents cover south suburban and western Cook County, Lake County and DuPage County, these are eight of the hottest suburbs, in alphabetical order, based on time on market and median sale price.
1. Antioch: Time on market down 32.3 percent, median sale price up 29.8 percent.
2. Addison: Time on market down 47.4 percent, median price up 5.6 percent.
3. Chicago Heights: Time on market down 36 percent, price up 31.8 percent.
4. Mundelein: Time on market down 28.9 percent, price up 4.4 percent.
5. Naperville: Time on market down 27.7 percent, price up 3 percent.
6. Oak Forest: Time on market down 42.9 percent, price up 19.9 percent.
7. Sycamore: Time on market down 30.3 percent, price up 12.3 percent.
8. Tinley Park: Time on market down 60 percent, median price up 7.6 percent.
This article provided by NewsEdge.