By Carole Sharwarko
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It’s getting tough to buy a house in the Homewood-Flossmoor community. Certainly there’s no shortage of great places — the real estate markets in both towns boast everything from cozy starter bungalows to grand brick-faced estates.
These days, however, finding the right house is only half the battle.
According to two local Realtors, the effects of a global pandemic have made this season’s housing stock especially scarce. More people want to buy new homes, while fewer owners seek to sell.
As a result, those hoping to buy a house in the H-F area must scramble to see properties and put in an offer, and then be ready to increase that offer if a bidding war starts.
Vicki Stevenson is a Realtor and operates her business, HF Homes, part of exp Realty, out of Flossmoor. When the coronavirus hit the H-F area in March, Stevenson said it dampened what normally is the start of the busy real estate season.
“The market halted for a few weeks because everyone was sheltering in place,” Stevenson said. “If you were to ask Realtors at that time what was going to happen with the market, we thought it was crashing.”
Realtor Brenda Morgan has been selling homes in Homewood and Flossmoor for 30 years. From her Orland Park office at RE/MAX Synergy, Morgan also said she saw little activity during the spring 2020 season.
“We missed the spring market a little bit because people didn’t know what was going to happen, and hearing how many deaths we were having was scary,” Morgan said.
As the quarantine dragged on, people began to evaluate their home environments much more critically. Spending days in the house with family, working from home and facing a year of e-learning all encouraged people to find a living situation that better suited their new needs, Stevenson said.
Many parents of small children are looking to leave the urban settings of Chicago, Stevenson said, in favor of suburbs that offer more room to roam and easier-to-access amenities.
“A lot of people wanted to get out of the city, wanted to get to a place where they have more space inside and outside, and into a school district that’s doing a better job with remote learning,” Stevenson said.
At the same time, the U.S. Federal Reserve Bank reduced interest rates to zero in an effort to buoy the economy. Morgan said this provided financial incentive for people interested in buying a home, especially for those looking to stop renting.
After experiencing a lull early in the season, Realtors were excited by this surge of eager home-hunters. However, Stevenson said, they faced an H-F real estate market lacking sellers.
People prepared to put their house on the market in 2020 slammed the door on the idea during the early days of the coronavirus pandemic, many concerned about strangers touring their home during a health crisis and having to do the same to find their own new home.
Morgan said she noticed this phenomenon especially among older clients, seniors who feared contracting the virus and took the shelter-in-place order seriously.
“Seniors who were looking to move over the spring or summer months, they became limited in what they were willing to do because they were among the group that was hit the hardest,” Morgan said. “People were asking, ‘Do I want people coming into my house right now? And do I want to go look at houses?’”
While inventory stayed low, demand continued to grow. In the current market, homes in Homewood and Flossmoor take two to three months before being sold, quicker than the same time in 2019, according to Midwest Real Estate Data.
• In March 2019, Homewood houses stayed on the market for 3.3 months before being sold. By August 2020, that figure dropped to 2.8 months, a difference of two weeks.
• In Flossmoor, the change was more dramatic. It took an average of 6.7 months — or nearly 27 weeks — to sell a home in March 2019. Now that average is 4 months.
Pricier homes are selling, too, Stevenson said, as city-dwellers discover they can get more for their money in the south suburbs, compared to communities north and west of Chicago.
“In all of 2019, we had only eight houses over $400,000 that sold, and this year we’re set to double that,” she said. “The starter homes are also going really fast. Blissfully, they’re also appraising higher.”
Low inventory creates a seller’s market, allowing homeowners to ask more for their house than they normally could, Stevenson said. Multiple buyers who desire the same house can out-bid each other to get it, driving prices even higher.
Realtor Susan Jenner, owner of The Jenner Group at Baird and Warner, said most of the homes listed for sale lately receive about 5 offers.
“I have been a Realtor for 21 years, and I have never seen our market like this,” Jenner said.
This surge in prices may help properties reclaim value they lost during the 2008 housing crash, Stevenson said. At that time, a bubble of risky subprime lending burst, causing mass foreclosures and a dramatic drop in home values across the country, including in the H-F area.
“We’re seeing the market move faster and have less inventory, we can justify bumping a price up over the comps (average value of similar homes nearby),” Stevenson said. “It can’t go up in jumps, though. That’s how we got into the market crash of 2008.”
Morgan worked through those housing crash years, and said that might have been even stranger than selling homes during a pandemic. What’s difficult now, she said, is not being able to connect with clients like she used to.
She mostly communicates with clients via phone and email now, instead of the face-to-face meetings she used to enjoy. While a parent or sibling might tag along to look at homes, clients don’t bring family members with them nowadays.
“This is a social business, and during the pandemic we can’t hug at the end, or even shake your hand when the contract is signed,” Morgan said. “We can’t do a lot of things we normally would do.”
Lately, clients often ask Jenner to conduct video walk-throughs, she said. If people want to see a property in-person, they use masks, gloves and hand sanitizer. Jenner said lately she advises buyers to approach the process with realistic expectations, given the low home inventory.
“Many of the buyers are looking for move-in-ready, picture-perfect homes,” Jenner said. “If you need to make a move, there may not be as many of those types of homes to purchase. Buyers may have to do some updating. If they want to take advantage of the great interest rates, that may be the only option.”