Homebuyer demand fueling market
April 19, 2013|By Mary Ellen Podmolik, Chicago Tribune reporter
Joanna Skolnick is back on the housing market's sidelines, a few months after starting the search to move her family from Chicago to the northern suburbs.
The family hoped to take advantage of an improving market, mortgage interest rates
 that are near record lows, and get their children into a new school district by fall. Now the family plans to stay in the Lincoln Park neighborhood for a while longer.
"If you're looking from $500,000 to $1.5 million, that's gone in a week," she said. "I've been looking ad nauseam on websites for months. It's been kind of exhausting. I don't want this to be a full-time job."
Looking to buy a home this spring or summer? Prepare yourself for a marathon that feels more like a sprint.
With the average rate
for a 30-year, fixed-rate mortgage at 3.41 percent this week and home prices starting to come off the bottom, it is indeed an appealing time to buy for consumers whose lives have been on hold because of the housing bust. But finding the right property has been a hurdle that many buyers are finding difficult to cross, as more homes go under contract even before their debut on the local multiple listing service.
Homes marketed privately, commonly called a pocket listing, used to be restricted to expensive or celebrity homes. In today's hot market, with inventory one-third to one-half what it was a year ago, pocket listings are occurring at most price
ranges in popular neighborhoods, leading to multiple-offer scenarios before the general public even knows the property is for sale.
Numbers from Midwest Real Estate Data LLC bear out the trend. In the city of Chicago in March, 4.7 percent of single-family homes and condominiums were received by the local multiple listing service on the same date as they were also classified as under contract. That's up from 2.6 percent in March 2012.
The market "is hot as blazes," said Russ Bergeron, Midwest Real Estate's CEO.
On Monday, the Illinois Association of Realtors will issue its March report on local home sales, and an early tally of county-level numbers shows almost without exception, sales volume surged, the inventory of available homes has plummeted and marketing time posted double-digit percentage declines.
Last month, according to Redfin, 12 percent of Chicago-area homes listed for sale went under contact within 14 days. That compares with 35 percent of homes nationally.
On a national level, the rapid pace of the current market has worried some economists, who question its sustainability because of stubbornly high unemployment numbers. Illinois' jobless rate in March remained at 9.5 percent, compared with 7.6 percent nationally, the state reported Thursday.
Nevertheless, consumers feeling good about their personal situations are eager to purchase homes and realty agents are working overtime to make sales. They are combing their databases to see if a past client might now want to sell. They are calling the owners of expired listings. And they are reaching out to other agents, either within their company or the same community, to trade
information on buyer preferences and premarket properties.
This year, agents at @properties began using an in-house app that helps match buyers with homes that have yet to come on the market. In March, it led to 40 off-market sales.
Real estate agents must enter a for-sale property into Midwest Real Estate Data's system within 72 hours of a listing agreement with the seller
.
"Agents are scurrying to get into these listings as soon as possible," said Thaddeus Wong, @properties' co-founder. "If a buyer comes to see the property before it's listed on the MLS, there's an element of urgency there. A buyer may say, 'I don't want to risk it going on the MLS.'"
In a three-month hunt for a bigger home than their Roscoe Village neighborhood loft, Brian Szmania and Ethan Sterling were having a hard time finding one that wowed them. One possibility, a town house, was under contract by the time they arrived at a showing.
The experience showed them how fast the market was moving for quality properties, according to their agent, Lance Kirshner, of @properties, who sent them pictures of an Andersonville neighborhood rehab that was going on the market in two weeks. Szmania and Sterling toured the property and offered to pay list price on the unit, with no contingencies, which was accepted.
"It makes you uncomfortable," Szmania said. "We were making this offer and we hadn't even gotten our place ready (to sell.) You see this paradigm shift. It's come in and make your best offer and that's it."
Kirshner sent out word to other agents about the loft. Three days before it was scheduled to be listed, it went under contract to a buyer who offered list price.
For the seller
, a premarket contract removes much of the hassle that comes with trying to sell one's home. There aren't multiple showings and open houses to endure, and there is less haggling over price. At the same time, sellers have to trust that an off-market sale is producing a result similar to if the property was listed publicly.
Given the national reports that paint Chicago as an unhealthy market compared with other cities, some buyers are surprised by what they're finding.
Laura Oliver's home
in Houston went under contract this week, three days after it was listed. In Chicago, she and her fiance, Douglas Chung, are having trouble finding a condo near Wrigley Field so they've increased their budget and crossed a few "must-haves" from their list.
"Everyone heard that Chicago got hit so hard," she said. "We kind of expected prices
to be lower, that it'd be slower and it'd be more of a buyer's market, but that's not what we're finding. We find one and then it's gone."
Realty executives expect the frenzy to continue.
"Sellers haven't seen enough appreciation in price
to justify putting properties on the market," said David Wolf, president of Related Realty. "In six to 12 months, sellers are going to feel more confident in values."
Baird & Warner agent Stephanie LoVerde, who is working with Oliver and Chung, said she has seen a pickup
in new listings during the past two weeks but she's still giving buyers the same advice: "Second showings are not even an option."
Twitter @mepodmolik
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Saturday, April 20, 2013
Homebuyer demand fueling market
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