2020 Chicago Real Estate Outlook

With the spring market in full effect, below is my outlook for the 2020 Chicago real estate market. Let me know if you have any other questions about the value of your home or the outlook for 2020!

The market will see slow but steady growth.

Most economists agree that the real estate market will see slow but steady growth through 2020, driven by low inventory and low interest rates. However, the expectation is that the growth rate this year will be between 1-3%.

Expect to continue to see less inventory.

Expect to see a decline in inventory in the city. A big factor for this is that development is not keeping up with demand. Many buyers currently looking for homes are looking in the low to mid-price point, where inventory constraints are more exaggerated. 

The key to growth in 2020 will be affordability.

There continues to be a growing demand for low to mid-range housing in Chicago, with very little inventory to show in that segment of the market. Although demographics are driving housing, Chicago’s inventory is not meeting the demand of the younger generations. Inventory is also tight in move-up segments of the market, which is further restricting entry-level housing.

Millennials are leading the housing market.

Demographics are driving the housing market, which bodes well for US homeowners where 60% of the population is under the age of 60. Millennials have the highest share of primary home mortgages.

Anticipate a pullback in construction throughout the city in most areas.

Housing construction throughout the city will see a decline for the second year in a row, although not in all neighborhoods. Areas with a population that is predominantly young and highly educated, such as Fulton Market are still seeing heavy action. 

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Chicago Property for Rent | 3033 N Sheridan Rd Unit 1606 | 2 Bed | 1 Bath | $2,250

Amazing 2bed/1ba with great views. Cable & internet included! 16th flr condo of 16 flr elevator bldg that is close to Lake Shore Drive. Fully remodeled in '05. Granite counters, glass top stove, dishwasher, in-unit European washer & dryer. Extra storage, tons of closet space, night door person, shared rooftop patio w/bbq grills, public laundry & more. All utilities included except electric. Superb neighborhood that is close to the Lake, golf course, tennis courts, running/bike path, driving range & more. Easy to walk to everything and lots of public transportation options. Parking $150 extra per month. See Link for virtual tour.

 

Interested? Get More Info Below.

Homes For Sale - Mount Prospect, Illinois - 325 Hatlen Avenue - 3 Bed | 2 Bath

This charming home offers three bedrooms, two baths and beautiful living spaces both inside and out. Enjoy an attractive, neutral color scheme accented by lovely natural light and gorgeous hardwood and vinyl flooring throughout. The fantastic kitchen boasts brand new granite countertops and stainless-steel appliances that are only three years old. Gather with friends and family for a delicious meal in the wonderful formal dining room conveniently located off the kitchen, then relax in the inviting living room with large windows and magnificent natural wood floors—newly done only five years ago. The finished basement boasts a wonderful living area with vinyl plank flooring and a full bath. Sit and take in the best of three seasons in the screened in sun porch which is fully insulated and includes a heater for the cooler months. Enjoy a peaceful night’s sleep in any of the comfortably sized bedrooms. Also find a spacious attached two car garage and attic with plenty of additional storage. The fully fenced, private yard is perfect for children to play and pets to roam. A new roof, new electrical panel, newer furnace and fresh paint sweeten the deal. Even more alluring in person. Come and see for yourself!

 

How To Price Your Home to Sell

Every time I meet with a seller one of the main topics we discuss is how to price their real estate to maximize the sale price while minimizing the time on the market. Most people have the belief that pricing real estate a little higher than the market value will give them flexibility to negotiate when the right buyer comes along.

This is the conventional approach that most sellers take but I can show you with hard data that this approach leaves a lot of money on the table for the seller. Below I will show you how to price your real estate to put you and your family in a position of power throughout the selling process.

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While this is the most common approach to selling real estate, in almost every case the sales data proves that you will get more money if you start at or slightly below the market value. Buyers are more educated than ever so they can spot an overpriced piece of real estate as they’ve probably been searching for weeks or even months online.

What happens when you start above the market value is you get some traffic but the savvy buyers don’t come to see the unit as online viewings have taken the place of first showings. For all my listings I shoot 3D walkthroughs and listing videos so buyers can get a feel for the home before they come to see it.

What happens around day 25 is the traffic to your home decreases dramatically. Why is this? Put yourself in the shoes of a buyer. They’ve been looking for months and a new property hits the market that looks like it might be the one. They rush over to see it in case it’s their new home. This is the same phenomenon with listings (just the reverse) so it’s not too surprising that about 80% of your traffic will come within the first 25 days of being on the market.

As the traffic dies down and we exhaust all our marketing channels (mailers, online advertising, reverse prospecting for buyers in the MLS, social media posts, email marketing, etc) it is time to take a price reduction to increase the traffic to the listing.

The challenge with reducing the price to the market value after it’s been on the market for a few weeks is that buyers no longer feel compelled to write a full price offer in fear of losing the property. Therefore they normally offer 5-7% below the new list price. At this point we’ve missed the opportunity to get the full market value for the property and lost most of our negotiating power. Inevitably, we will end up selling the property 1.5-3% below what we could have got if we had priced the unit at the market value from the start.

Below is the data from the past 12 months of condo sales for 1 bedroom and 2 bedroom condos in the South Loop. In the case of the 2 bedroom condos, units that took a price reduction sold for a median price of $516,250 vs units that did not take a price reduction which sold for $537,000. That is a massive difference to your bottom line.

I also ran this for 1 bedroom units to confirm the data. The median price for the units that took a price reduction was $315,000 vs $335,000 for units with no price reduction. That’s why it is important to get the pricing right from the start.

All this sales data doesn’t take into account the added expense of increased time on market. One bedroom units that had to take a reduction sat on the market on average for 75 days vs 39 days for units that didn’t take a price reduction. This additional 36 days cost the owners in taxes, assessments, insurance and mortgage interest. Not including the stress of their unit not selling and the inconvenience of having to show their unit more and keep their house in showing condition. The story is similar for the 2 bedroom condos which sat for an additional 74 days on average.

Pricing your home is an art and a science. It’s not easy to always hit the market on the head but by using multiple data sources (comps, price per square foot, active inventory, absorption rate, etc) we can triangulate a price range that should be acceptable to the market and should put the most money in your pocket.

I know that selling your home is stressful and my job is to get you the most money in the least amount of time. Valuing real estate is one of my strong suits since I have a quantitive background. If you have any questions about this article or pricing your home, reach out to me and we’ll set up a time to talk.

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What is a refinance and should you do it?

You may have heard people talking about refinancing their home lately. This is because interest rates just decreased again and are expected to stay low for the remainder of the year. A refinance of a loan is simply replacing your current mortgage with a new mortgage with different terms. The terms of a mortgage are usually interest rate, term of loan (number of years) and PMI (private mortgage insurance).

When rates drop you will hear a lot of talk about refinancing because it is a great way to reduce your monthly payment on your mortgage. The biggest cost on your mortgage is your interest charge. Reducing your interest rate can have a drastic impact on your monthly cost. Depending on your situation, you could also eliminate the need for PMI which is a large cost to borrowers that put down less than 20% of the purchase price. If you’ve added additional principle to your loan over time this will further increase your potential savings.

What Drives Interest Rates?

The Federal Reserves uses monetary policy to indirectly change interest rates. The Fed can tighten or loosen the amount of money in the system through buying (loosening) or selling (tightening) bonds. This is an over simplified explanation but one of the most common tools the Federal Reserve uses. As the Fed makes these changes there is either more money in the system or less. If there is more money in the system rates typically go down.

Reasons the Fed Tightens or Loosens Rates

There are many reasons that that fed may tighten or loosen rates. Below are a few reasons they change policy:

• Economic data

  • Factors that Drive Rates UP

    • Non Farm Payrolls are higher than expected

    • Unemployment rate goes down

    • Better than expected economic data in general

  • Factors that Drive Rates Down

    • Jobs data stagnates or is in decline

    • Manufacturing is stagnant or slowing

    • Housing is weaker than expected

• Inflationary Pressure

  • Factors that Drive Rates Up

    • Higher consumer price index

    • Higher wholesale prices

    • Hourly earnings increase

  • Factors that Drive Rates Down

    • Lower consumer prices

    • Lower wholesale prices

    • Hourly earnings decrease

Why Refinance Now?

There are a lot of reasons to consider refinancing now. There are however some reasons to consider not refinancing. Talk with your lender to see if a refinance makes sense for you.

Pros

• Rates are currently near an all time low. If you are going to be in your home for a long time now is a great time to lock in a great long term rate.

• Refinancing can save you anywhere from a few dollars to a few hundred dollars per month depending on how much princinple you’ve paid off and your current rate on your loan.

• Refinancing can eliminate PMI depending on how much principle you’ve paid off and how much your home has increased in value. This can have a enormous impact on your monthly mortgage payment.

Cons

• Refinancing will put you back at the beginning of the interest curve. If you are making the base mortgage payment it takes about 7 years to start paying down the debt on your loan (this does not account for equity built through appreciation). If you refinance you are starting the 30 year mortgage from scratch and therefore the interest curve.

• Refinancing extends the term of your loan (unless you choose a shorter term). Therefore, if you had planned on matching your loan term to your retirement or another life event it will extend this time.

• Most lenders can refinance without closing costs but there may be costs associated with refinancing. You need to make sure that the math works in your favor depending on how long you plan on staying in your home.

99 W Park Avenue Unit A | 2 Bed | 2.1 Bath

This charming unit offers two bedrooms, 2.5 baths and wonderfully inviting spaces. New owners will enjoy quality fixtures and attractive finished throughout. The elegant formal dining room is perfect for entertaining, showcasing a gorgeous chandelier and large window. Every chef will love the thoughtfully planned kitchen featuring stainless steel appliances, plenty of cabinet storage, large pantry and a great gas range. Conveniently located just off the kitchen, the utility room with washer and dryer keeps laundry out of sight. A wonderful spot to relax, the living room is bright and inviting. Gather for a casual mean in the delightful dining area just off the kitchen with sliding doors which lead out to a charming patio. Venture out to sip your morning coffee in the open air. Upstairs, find a spacious loft ideal as a den, additional living, playroom or hobby space. Enjoy a peaceful night’s sleep in the beautiful master bedroom with vaulted ceiling, walk-in closet and great en-suite bath with jetted tub and dual vanities. Also enjoy a two car garage, Central A/C. Convenient location in a great community!

1228 W Monroe St Unit 401 | 2 Bed, 2 Bath | Condo

Gorgeous 2 bedroom / 2 bathroom unit in the heart of the West Loop. This unit features granite countertops, stainless steel appliances and hardwood floors. Available September 1st. Garage parking available for $200. No security deposit, move in fee $1,000.

Every home has a unique story and the TC Group would be honored to tell yours. We understand luxury real estate in Chicago. Our primary objective is to partner with you and achieve the highest net proceeds as quickly as possible. We pride ourselves on personal service and attention to our clients’ every need—our goal, for every transaction, is to create ecstatic customers. Selling a home in today’s market can be challenging and the TC Group understands this. In spite of a shifting market hundreds of homes are sold each month in Chicago. What’s the difference between selling your home or failing to do so? The Details. We believe one of the best ways to capture prospective luxury homebuyers is to create cutting-edge content for engagement. Our videos focus on the endless premium amenities that the properties have to offer and an exclusive inside look at the homes – leaving prospective homebuyers craving more.

To schedule a private showing of one of our properties call 702-528-2267. Connection Matters, Get Social With Us:

Subscribe to our YouTube Channel: http://bit.ly/2UGPP8L

Facebook: http://bit.ly/2ZhfROB

Instagram: http://bit.ly/2UnEdT1

Zillow: http://bit.ly/2vA2Rnl

2432 W Chicago Ave Unit 1S | 5 Bed | 3 Bath Duplex

New construction 5 bed/3 bath duplex-down offers extra wide living space w/ a sleek modern design. Features of this special home include: kitchen cabinetry by LEICHT, Quartz countertops, Bosch stainless steel appliance package, Pella windows, JELD-WEN doors and Grohe/Hansgrohe plumbing fixtures. Additional desirable features: hardwood floors, carpet on lower level, Porcelain tiled baths w/Quartz counters, spacious master bath w/ huge walk-in shower, heated floors and double bowl vanity. Other highlights: closet organizers, Nest Thermostat, recessed lighting, large covered terrace (6x34) off main living area & garage rooftop deck (20x18). Garage parking include in price. Ideally located - this home is a short walk to boutiques, salons, shopping, coffee shops & restaurants. Also close by popular Smith Park, w/ recreational amenities for entire family. 10 minute walk to Western Metra stop. Non refundable move in fee $2,500. No security deposit.

Every home has a unique story and the TC Group would be honored to tell yours. We understand luxury real estate in Chicago. Our primary objective is to partner with you and achieve the highest net proceeds as quickly as possible. We pride ourselves on personal service and attention to our clients’ every need—our goal, for every transaction, is to create ecstatic customers. Selling a home in today’s market can be challenging and the TC Group understands this. In spite of a shifting market hundreds of homes are sold each month in Chicago. What’s the difference between selling your home or failing to do so? The Details. We believe one of the best ways to capture prospective luxury homebuyers is to create cutting-edge content for engagement. Our videos focus on the endless premium amenities that the properties have to offer and an exclusive inside look at the homes – leaving prospective homebuyers craving more.

To schedule a private showing of one of our properties call 702-528-2267. Connection Matters, Get Social With Us:

Subscribe to our YouTube Channel: http://bit.ly/2UGPP8L

Facebook: http://bit.ly/2ZhfROB

Instagram: http://bit.ly/2UnEdT1

Zillow: http://bit.ly/2vA2Rnl

HOMES FOR SALE - CHICAGO SOUTH LOOP - 1804 S Calumet | 3 Bed | 2.1 Bath

Don’t miss your chance at this bright & airy, beautifully maintained townhome!Located in the historic Prairie District, this 3-bed, 2.1-bath home is just a quick commute to Soldier Field, Lake Michigan, Museum Campus & so much more! With over 2,400 sq. ft. of thoughtfully designed living space, this spacious town home also offers a bonus room perfect for a child’s playroom or home office! Full of natural light, this stunning townhome has been customized w/unique details throughout the space, from the designer flooring to the crown molding, gorgeous fireplace, wainscoting details, arched windows & more. The open concept living space connects the living & dining areas to the chef’s kitchen, creating a true heart to this stunning home. The bright & beautiful kitchen offers plenty of storage in the custom cabinetry, modern stainless-steel appliances & bonus breakfast bar seating. A balcony off the kitchen offers room for a grill or bistro set. Fully equipped w/ in-unit laundry hook up & oversized single-car garage, this stunning townhome offers all the amenities you could need in the perfect location & is sure to go quickly! Schedule your private showing today!

4004 N St Louis Ave #1S | 4 Bed | 3 Bath Duplex

This gorgeous duplex offers four bedrooms, three baths and beautifully updated spaces. Sparkling hardwood flooring, many large windows, generous natural light and 10 foot ceilings add beauty and charm. Enjoy a spacious kitchen with granite countertops, brand-new stainless-steel appliances, generous cabinet storage and convenient breakfast bar. Linger over a meal in the large dining area, just off the kitchen or kick back and watch a show in the comfortable living room with cozy fireplace. Each of the bedrooms are spacious and comfortable. The master features a gorgeous ensuite bath with dual vanities and separate shower and soaking tub. Great wet bar area on lower level with sink and wine refrigerator – ideal for entertaining. Utility/laundry room, tandem parking space, great office space, plus new roof!

Chicago Real Estate Update - May 2019

Below is a link to the most recent real estate market data for the city of Chicago. In the report you will find a breakdown of each neighborhood. You will find the year over year data for new listings, units under contract and closed sales. You will also find median sales price. I also have historic data available if you want to get a better idea of how much your neighborhood has appreciated since you’ve purchased your unit. For more information feel free to contact me directly.

Homes for Sale - Chicago South Loop - 1841 S Calumet Ave #611

Beautiful and Bright, this unit is just over 1,000 square feet offering two bedrooms, two baths and a wonderful open concept floor plan. Relax in the inviting living room with lovely hardwood floors and floor to ceiling windows which look out to the city beyond. The kitchen gracefully flows from this space and boasts an intuitive layout with sparkling granite countertops, stainless steel appliances, great cabinet storage, large pantry, and convenient breakfast bar. The tranquil master has a fantastic upgraded closet organizer and great ensuite bath. In unit washer and dryer are tucked out of sight. Lounge out in the open air on the magnificent outdoor terrace and take in the expansive city views!

Every home has a unique story and the TC Group would be honored to tell yours. We understand luxury real estate in Chicago. Our primary objective is to partner with you and achieve the highest net proceeds as quickly as possible. We pride ourselves on personal service and attention to our clients’ every need—our goal, for every transaction, is to create ecstatic customers. Selling a home in today’s market can be challenging and the TC Group understands this. In spite of a shifting market hundreds of homes are sold each month in Chicago. What’s the difference between selling your home or failing to do so? The Details. We believe one of the best ways to capture prospective luxury homebuyers is to create cutting-edge content for engagement. Our videos focus on the endless premium amenities that the properties have to offer and an exclusive inside look at the homes – leaving prospective homebuyers craving more.

To schedule a private showing of one of our properties call 702-528-2267. Connection Matters, Get Social With Us:

Subscribe to our YouTube Channel: http://bit.ly/2UGPP8L

Facebook: http://bit.ly/2ZhfROB

Instagram: http://bit.ly/2UnEdT1

Zillow: http://bit.ly/2vA2Rnl

Real Estate Taxes

Real estate taxes can have a profound impact on your financial future. In this video I talk about two tax shields that real estate provides to help you build your wealth.

Every home has a unique story and the TC Group would be honored to tell yours. We understand luxury real estate in Chicago. Our primary objective is to partner with you and achieve the highest net proceeds as quickly as possible. We pride ourselves on personal service and attention to our clients’ every need—our goal, for every transaction, is to create ecstatic customers. Selling a home in today’s market can be challenging and the TC Group understands this. In spite of a shifting market hundreds of homes are sold each month in Chicago. What’s the difference between selling your home or failing to do so? The Details. We believe one of the best ways to capture prospective luxury homebuyers is to create cutting-edge content for engagement. Our videos focus on the endless premium amenities that the properties have to offer and an exclusive inside look at the homes – leaving prospective homebuyers craving more.

To schedule a private showing of one of our properties call 702-528-2267. Connection Matters, Get Social With Us: Subscribe to our YouTube Channel: http://bit.ly/2UGPP8L

Facebook: http://bit.ly/2ZhfROB

Instagram: http://bit.ly/2UnEdT1

Zillow: http://bit.ly/2vA2Rnl

Chicago Real Estate Market Update - March 2019

Both the Chicago and National real estate market has cooled off over the past 12 months. Find out my thoughts of what this means for buyers and seller in the rest of 2019.

I’M READY TO START LOOKING FOR A HOME NOW WHAT?

So you are ready to purchase a home. Where do you start? A great place to start the process is with engaging a real estate professional. Anyone can show homes but only a qualified real estate broker will help you navigate the process from contacting a financial planner, introducing you to a qualified lender and discuss your needs and wants to find you the right home. They should have access to off market properties as well as the MLS (Multiple Listing Service) to ensure you see everything that is available that fits your "must have" list. Qualified real estate professionals bring expertise and guidance that will make sure that you not only find a home that you love but one that will appreciate and will be marketable when you are ready to sell. 

How Long Does It Take to Purchase a Home?

Ever wonder how long it takes to buy a home? In this video I cover the 5 steps you’ll encounter during the home buying process. I’ve also included a link below to my “Roadmap of a Transaction” that shows the timeframe for each step as well as some of my partners I use in my brokerage business. All of my partners are based out of Chicago but my lender partners are able to originate loans throughout the country. Enjoy the video and let me know what you think in the comments.

Chicago Real Estate Market Data - February 2019

Below is a link to the Chicago Real Estate Market Data for Chicago. This report covers all the Chicago neighborhoods. What I find interesting is the increase of inventory since July of 2018. We will have to watch inventory going into Q2 of 2019 to give us more direction of the health of the market. There is a lot of data in this report so if you have any questions feel free to reach out to me and I’ll help answer any of your questions. 

333 W Hubbard St Unit 610 | 3 Bed | 2.1 Bath - 2300 Square Feet

Modern and inviting, this spacious 2,300 ft. combined unit offers three bedrooms, 2.1 baths and magnificent upgrades including designer lighting and custom features throughout. The main living area showcases a luxurious open concept with lofty 15-foot ceilings and large, nearly floor to ceiling, windows which frame stunning views of the cityscape. This space is warm and bright yet still maintains a cozy feel – wonderful for entertaining and relaxing alike. Gather around the table for a delicious meal, sip your coffee out on the balcony or settle in to watch a favorite show. The artfully designed chef’s kitchen leaves nothing to be desired boasting stunning quartz countertops, gas cooktop, stainless steel appliances, wine refrigerator and huge center island. Prepare a meal and take-in the gorgeous views. Each of the bathrooms are upgraded with marble countertops and fine fixtures. Ideally located, close to shopping dining and entertainment. Residents enjoy a beautifully landscaped courtyard and 24 hour doorman. 

2429 N California Ave #1S - Logan Square 3 Bed | 3 Bath | Duplex

This beautiful, three-bedroom, three bath home enjoys a fantastic location in Logan Square. Lovely details such as rustic exposed brick, built-in shelving and hardwood floors add character and charm. Relax in the inviting living room with large windows and ambient recessed lighting. Enjoy a thoughtfully laid out kitchen with stainless steel appliances and great cabinet storage. Sip your morning coffee in the lovely sunroom. Also find a fully fenced backyard and convenient 1 car garage. Ideally located within walking distance to parks, sports fields and nightlife.

How to Write a Successful Real Estate Offer

The Chicago real estate market is extremely competitive. I’ve had many buyers miss out on their first and even their second offer due to the competitive nature of the marketplace. I suggest my clients follow the suggestions below to increase their likeliness of getting their offer accepted.

1. Find the property you love.

   Most people think that they are going to find the perfect home. I hate to be the bearer of bad news but that property doesn’t exist. Instead focus on the 90% property. Throughout this process you will find constant tradeoffs. Whether it be location, size or price, you will be making some sacrifices in your next purchase. Try to build a list of must have features and keep them top of mind. Then build a list of “nice to have” features so you know what is important. If you take this approach you will be much happier with your next home and it will give you clarity throughout the process.

2. What is the home worth?

   Once we’ve found the home we need to figure out what it is worth. We will start with comparable properties that have sold in the last 6-12 months. But comps don’t tell the whole story. Other items that factor into the value of a home include current inventory, time of year, median price/square foot, market time of the listing, and list/sold ratios for the area.

3. Preparing the offer

   After we’ve put together a thorough market analysis, we will write up our offer. It is best to make an offer that is close to what we think the property is worth. I’ve seen too many buyers write lowball offers that end up costing them money in the end. The reason for this is that it can offend the seller and then the rest of the process becomes contentious. If the seller is offended by your offer they won’t want to work with you and every step in the process becomes a fight. I often find that you get into a nickel and dime situation during every turn of the transaction which costs you money in the long run. Remember that the purchase price is only one aspect of the transaction. You still need to negotiate the closing terms and inspection items. There are dollars to be gained or loss in those aspects too and if you start with a lowball offer you are much less likely to have any collaboration during these steps of the purchase.

4. Pre-approval letter

   You will want to include your pre-approval letter with your offer to validate that you are a legitimate buyer. I always recommend you work with the right lender for your situation. I normally recommend either Guaranteed Rate or Wintrust since they both have local underwriters who know the unique aspects of the Chicago real estate market and can be available if and when we hit a snag in financing.

5. Letter to the sellers

   I recommend all my clients write a letter to the sellers introducing themselves. This helps differentiate you from other buyers and helps humanize the process. I’ve had multiple offer situations where sellers took our offer which was lower than the competition because they connected with the new buyers through this letter. It’s an extra step but I believe it is a competitive advantage in the end.