The market has not been kind to the home seller.
The bad news continued last week when the SP/Case-Shiller home price index reported that Chicago-area homes prices fell in November for the third month in a row, to a level not seen since May 2001.
Still, there are pockets, small pockets, where at least in the fourth quarter of 2011 the housing market looked better than it did a year ago. The telltale signs: an increase in median sales prices, an increase in the number of closed sales and a decrease in the number of days on market.
There is no guarantee that the positive signs will continue in the more than a dozen ZIP codes that showed improvement in all three areas, and experts want to see another three months of statistics before they label an area as recovering. A rash of distressed properties also will send the market downward. But given five years of bad headlines about the housing market, even the smallest inkling of positive news may be welcome for homeowners and industry watchers.
“Real estate has become a spectator sport because of the Internet,” said Russ Bergeron, CEO of Midwest Real Estate Data LLC, the local multiple listing service provider. People “want to know what’s going on in their neighborhood. The (greater) number of units means stuff is at least moving. If you can string together six to nine months (of good numbers), then you’ve really got something to be excited about.”
Many communities showed improvements in the average number of days it took to sell properties, according to data provided to the Tribune by Midwest Real Estate Data. And many also showed a greater number of closed sales than last year’s fourth quarter.
Far fewer showed higher median selling prices, but pricing is expected to remain under pressure until distressed inventory is cleared from the market.
“There’s no magic formula on anything like this to say we’ve accomplished a turnaround,” said Zillow senior economist Svenja Gudel. “If you have a fairly tight (housing) stock, that will help put a floor under prices, because people are snapping up houses.”
Among those areas are the communities of McHenry, Johnsburg and Lakemoor. When gasoline prices topped $4 a gallon, Toni Wardanian, a real estate agent at Stedman’s Real Estate, saw homebuyer interest wane because no one wanted an expensive commute.
With both gas prices and mortgage rates far more attractive, she is again seeing interest in starter homes as well as getting calls from existing homeowners who want to take advantage of the overall low prices and trade up to larger homes.
“We have houses listed for $50,000, and that’s just crazy,” she said. “They need work, but some are diamonds in the rough.”
Indeed, of the 49 homes sold in the 60051 ZIP code during the fourth quarter, 15, or 30 percent, sold for between $50,000 and $99,999, according to Midwest Real Estate Data.
In many cases, real estate agents say homeowners are finally coming to grips with the reality that if they want to sell their home in the current market and in a timely fashion, they have to price it competitively.
After 14 years of living in Naperville, homeowner Kathy Schutz wants to move to Chicago with her 11-year-old son by late summer. Having recently put her home on the market, she’s encouraged by what she hears but remains a little apprehensive. She listed the home in 2009 at the same price, $419,000, but took it off after a few months. She’s kept the same price, reasoning that it’s similar to the recent comparable home sales she’s seen.
“You mentally get a number in your head, and I don’t know how much I’m going to have to adjust it,” said Schutz, an equity analyst. “I think I’m in the ballpark, but we’ll have to wait and see. I deal with economic data all day. I don’t feel as bullish as these Realtors do, but you do hear people saying, ‘Boy, there are some great deals out there.'”
The mild winter certainly has helped showings and buyer interest, said Erene Panos of Re/Max Action. Panos still has conversations weekly with sellers about pricing, but list prices aren’t being dropped as quickly as they were a year ago.
“We aren’t getting as saturated by the foreclosures as before, and that’s definitely helping the resale market,” Panos said. “And if you have a home that has been very well taken care of, it’s not going to be there that long.”
Michael and Ilana Sherman made an offer on a Highland Park home the day after it came on the market, before Michael had even seen it. The couple sold their Lincoln Square condo at a loss in 2010 and began renting in Wilmette while they began watching the residential markets along the North Shore, waiting for the right opportunity. After walking away from one offer and losing out to a higher bid on another, the couple went under contract on a four-bedroom split-level a few hours after Ilana toured it, at the list price of $325,000.
“We kind of expected going into it that we would be able to take our time,” Michael Sherman said. “But the reality is, the houses that are priced accordingly to their real value and that are in structurally good shape go very fast. When you see it, and we’d been looking for a while, if you want to own your own home, then you have to react fast.”