Spring is typically when the residential real estate market comes to life and new listings proliferate—but perhaps not this year, given that inventory is at a serious low. (According to national real estate brokerage Redfin, the Chicago area had only 28,261 homes for sale in December, down 27.2 percent from a year earlier.) We asked two brokers who specialize in the luxury market—Baird & Warner’s Gail Missner and Related Realty’s Kathleen Malone—how buyers can spring forward right now.
How is low inventory impacting the market?
KATHLEEN MALONE: We can’t get people in the door fast enough. Brokers have to be on top of inventory, and buyers have to be serious and make their offers quickly—almost always on the spot. GAIL MISSNER: And they have to strategize with their brokers. One recent sale I worked on wasn’t even on the market. A broker who knew a building was hot asked the owners of its penthouse if they would sell, then she called all the brokers she knew with clients that were interested in the building. It sold in a few days for close to $5 million.
What kinds of apartments are hot these days?
KM: The trend before the “fall” was to cram them all in; developers built big buildings with a few hundred units. But now everyone wants smaller buildings with large floor plans.
The entrance to 35 East Elm Street
What are examples of smaller buildings? KM: Eleven East Walton Street, formerly The Elysian, only has 51 units; 840 North Lake Shore Drive has 73; and 50 East Chestnut Street has 34. The latter only has full-floor units, and one just sold for $600,000 more than it cost a few years ago. GM: These smaller buildings are extremely rare, and many developers don’t even list them on the MLS because they don’t need to. Fenton Booth of Ogden Partners is completing a 14-unit building at 416 and 422 West Deming Place with units that range from two-bedrooms for $775,000 to a four bed penthouse for $1.9 million; it’s almost sold out.
What about single-family homes? KM: By the time something shows up on the MLS, it’s gone because there’s so little inventory. Everyone wants at least three-bedroom, three-and- a-half-bath homes with finished basements. GM: And if you look in Lincoln Park or for four bedrooms, that puts you in a whole different strata. Each additional bedroom and bathroom can add $100,000 and up to the purchase price. So what can serious buyers do? GM: Building is picking up again, but if you can’t afford to wait, you need a well-connected broker who really stays on top of the market. KM: And you have to be prepared to pay asking price. Gone are the days of negotiating, at least for now. Kathleen Malone, Related Realty, 350 W. Hubbard St., 773-600-1551. Gail Missner, Baird & Warner, 737 N. Michigan Ave., 312-804-1922