Two local experts offer tips on negotiating the recent swings of Chicago's luxury real estate market.
A $3.495 million, five-bedroom, four-bath home at 1928 North Fremont Street is priced to sell.
Low inventory and low interest rates—especially where big-ticket properties are concerned—have made this market a perfect storm for buyers. The upside? Sellers are finally getting their just deserts with decent prices. But the luxury market remains tricky for both parties in the buying equation, say @properties’ Rich Neal (773-220-2884) and Coldwell Banker’s Rachel Krueger (312-867-8121). Here’s why.
Aren’t prices on the rise? Explain what you mean by “tricky.” Rachel Krueger: Yes, home prices have recovered about 80 percent of their 2008 levels in Illinois. But the tricky part is that we’re in year two of an inventory shortage, and things that didn’t trade last year because they were priced too high are back on the market—and not necessarily at the right price. It’s still a buyer’s market in the sense that if it’s not priced to sell, it won’t sell. Rich Neal: People want “done,” and done equals sold. My buyers say they don’t mind doing a bit of work—but everyone’s spoiled by HGTV, where it takes 30 minutes for a complete renovation. Speed is a byproduct of our current culture.
Give an example of what you mean by “priced to sell.” RK: I had a listing for a cottage-style single-family in South Lincoln Park. It was sweet, but not pristine. We priced it at $1.75 million and got a really good offer in a week for $1.625 million. My seller didn’t agree and turned it down. It finally sold a few months ago, 10 months after listing, for $1.48 million. RN: I just had the reverse. I listed a 10-year-old, three-bedroom, two-bath, 2,000-square-foot condo at 550 West Wellington Avenue with indoor heated parking. They had redone the floors and baseboards, and the kitchen was still in perfect shape. It didn’t need any work, so we priced it really aggressively at $800,000. We had an offer in two hours for [the asking price], but financing fell through and it just came back on the market. Good properties in good condition priced right last a week or two. It’s very competitive right now for buyers.
So is the new rule “no work”? RN: Some of my buyers say they will do a bit of work if the price, bones, and location are right. But when it comes to the second showing, the properties that need work fall off the list. What does that mean for the listings you’re currently selling? RK: My highest-priced listings are priced to sell. A five-bedroom, four-bath, two-half-bath resale at 1928 North Fremont Street for $3.495 million is only 10 years old. It has great outdoor space and a 2.5-car garage. It has definitely stood the test of time.
So how do you find the kind of properties your buyers want? RN: You scour the MLS, and [your clients] have to be ready to go as soon as something hits. I have a young couple looking in the $1.5 million to $2 million range, and they take turns leaving work to see things as they come up. RK: And when you know what a client wants, you have to reach out to your broker network and keep reminding them. That way, they’ll be in touch with you when they list something—or even before it hits the MLS.