We would like to welcome the newest addition to our team, Giorgia Kusic. Giorgia joined Enterprise Realty Brokers because she recognized the quality that our company offers to its clients. She wanted to be a part of a growing company where she can truly make a difference. She brings another level of energy and passion for real estate to our team. Giorgia will primarily service the southwest Chicago suburbs. She speaks English and Serbian. You can reach her by calling 708-340-3668 or emailing [email protected]
Q2 Market Real Estate Market Review- Oh That Supply!
Positive Market Activity
Real Estate market activity in the first 6 months of the year remained strong and continued to exceed the market activity for the same period of 2016 and 2015.In the first 6 months for 2017 the number of homes sold in the MRED (Midwest Real Estate Data) service area, which covers most of Northern Illinois, grew by 4.44% in comparison to the same period in 2016.Additionally, the average sales price of the homes increased to nearly $285,000, representing an increase of 4.23%.While these numbers represent strong market activity, it is important to note that the growth in number of transactions as well as of average price, in comparison to the growth in the first six months of 2015/2016, has slowed down.
Overlooking bargains on bigger homes
If you are looking to buy a home in the Chicagoland area, particularly a smaller home with less than 3,000sf, you are in for one frustrating endeavor.Poor selection, high demand and high prices are just some of the issues our clients have been facing this year.On the flipside of that, sellers of homes smaller than 3,000sf are very much enjoying the situation, but not enough of them decide to cash in.
The main reason for the low supply of the smaller and more affordable homes (less than 3,000sf and $400,000) is the fact that there is little to no new construction taking place in this segment.The supply is coming from resale only.In the graph above you will notice that the supply of homes smaller than 3000sf is less than 5 months (meaning that if no homes are added to the inventory the current inventory would sell out in 5 months).The inventor of homes smaller than 2000sf is even lower.Experts say that the healthy balance in the real estate market is between 6-7 months supply of inventory.Many homeowners who currently own smaller homes or condos are hesitant to move onto a bigger property despite the fact that they can get premium for their home and possibly a bargain on a larger home (specifically homes $600,000+).High taxes and investments necessary to improve or maintain larger homes are the main causes of buyers holding off on purchasing larger, more expensive homes.Current supply of inventory in this segment is over nearly 9 months for Cook and Dupage County and over 11 months in Lake County.Due to this reason, the $600,000+ market is very much buyer’s market, despite low interest rates and arguably, good economy.A large majority of our seller clients this year have been people who are moving out of state or selling their investment property, not those who are moving to a bigger place.
In regards to the market outlook we don’t foresee a major shift in the real estate trends.There are talks about the interest rates possibly being increased one more time before the end of the year or in the early 2018.However, the last two increases have not produced a significant impact on the real estate rates.On the other hand it is important to note that the global economy has not suffered from a major correction for some time now.Economists predict a major correction at least once in 10 years, which means that sometime in the next 2-3 years we can expect a major slowdown in the economic growth or even recession.As that is usually followed by the increase in the unemployment rates we can expect to see a slowdown in real estate market activity as well.While owner occupants may put up a fight and resist the price drop, investment properties, particularly residential rental units may see a drop in value as renters may not be able to continue to afford the current sky-high rents.
In summary, real estate market is strong and prices, on average, continue to grow.Anyone looking for a bargain will only be able to find it in the segment of large and expensive homes.Owning real estate is still much better than paying rent, but depending on how the economy performs, that may not hold true for long.
Enterprise Realty Brokers welcomes Val Popovic, an experienced real estate broker specializing in the representing buyers and sellers of residential real estate in the city of Chicago and suburban areas. With dozens of successful deals behind him Val brings the experience and quality of service to our company. Val is a great addition to our team and we look forward to working with him in the years to come. To reach Val please call 312-780-9300 or via email at [email protected]
Our very own Dan Cuckovic, Managing Broker and owner of Enterprise Realty Brokers was named Agentology (also known as MyAgentFinder.com) Agent of the Week. Dan helped the last three consecutive clients referred by this service find or sell their home. Enterprise Realty Brokers is a trusted MyAgentFinder partner and we look forward to successfully serving even more clients referred to us by this service. We also thank Blair, James and Leslie for being awesome clients and we look forward to successful closings on all three of these transactions.
What a great start of the year for the Chicagoland real estate market! Despite the rise in interest rates, the mortgage rates have not increased significantly and remained very much affordable.
The number of closed transactions in 2017 is just slightly higher in comparison to the same period last year (25,149 vs 24,777), but the overall dollar volume of the closed transactions has increased significantly. This indicates that the average price increase for all closed transactions in Q1 is 5.95%. The average sales price in March alone was $277,693. Townhouses contributed least to the price increase with an average townhouse increase of 2.9% over last year. On the flipside, the highest price increase came from condos, where the average price increase was 10.9%.
Average Price Increase YoY
Average market time for closed properties in Q1 2017 dropped to 103 days, from 111 in 2016. Townhouses and condos were selling as quickly as 83 days, while homes (defined as detached single dwellings), were selling in 113 days. Interesting note is that the average market time for larger homes (3000sf+) has increased from 175 days in Q1 2016 to 190 days in Q1 2017. Homes up to 2000sf, including condos and townhouses, appear to sell the quickest (89 days).
Month’s supply graph shows the number of months it would take to sell out the entire inventory of real estate currently on the market, at the current demand, without adding additional inventory. Supply continues to be the biggest issue and concern in the market currently and it is what is driving the increase in prices. The supply of real estate continued to shrink over the years and has reached a low of only 3.3 months. This is the lowest supply in the area in decades. The decrease came despite the increase in the number of new listings in Q1 of 2017. The number of new listings hitting the market has increased by 1.2%, but a strong demand continues to absorb any good listings that hit the market.
We expect that the demand for the real estate in Chicago will continue to be strong in the near to medium term. There is a limited amount of new construction producing the number of properties needed to fill the demand and the high rents are driving more and more millennials to transition into homeownership. It is expected that the interest rates will continue to rise this year at a slow to moderate rate. It is feasible that we will see a 30 year mortgage rate reach 5% by the end of the year. Although this may discourage some buyers from purchasing, it may be balanced by reluctance of the current owners to sell their homes. The reluctance will likely be the result of current homeowners hesitating to take on a higher interest rate on the new house (come on, who hasn’t locked in a 3.5% rate already??). We expect that the balance between buyers and sellers will, in the near term, remain similar as it is now, with sellers driving the market.
March 21st 2017- Many people are drawn to the American dream of home ownership but they never realize how complex it can be until they get right in the middle of the process. Of course, having an experienced real estate agent to guide you is definitely an advantage. In spite of that, many people believe that low-balling on their first offer on a house is the way to go. After all, who knows? Maybe the owners are so desperate to sell that they’ll accept the low offer.
Though buying a great home at a low price is everyone’s dream, it normally doesn’t work. In many cases, the owners are offended by the offer and won’t even make a counter offer. How sad to see someone lose out on a home they’ve spent months searching for. So what should your first offer on a house be?
This is a question often asked by our clients here at Enterprise Realty Brokers. Though our commission is higher if you pay more, that never influences our decision or advice. As professionals in the home buying business, we want our clients to get a great deal. However, we don’t like to see clients lose out on a house they love just because the offer was presented wrong. Instead, we work together with our clients to help them arrive at a number they feel good about, and a number that’s strong enough to win if there are multiple offers.
If you’ve searched for months to find that perfect house, then it’s definitely our goal to help you get it at the lowest possible price. We arrive at that number by utilizing several helpful resources. This includes years of experience and the helpful insights available from the Multiple Listing Services (MLS). Here, we can quickly discover the average home price in a specific neighborhood. That’s a great way to learn what you can expect to pay for a comparable home in any area.
A long time adage for real estate agents, the location of your home is paramount. Sometimes home values vary greatly when there’s only a mile or so between a prime, highly desired location and a not-so-great location right next to the railroad tracks.
Of course, a lot goes into deciphering those figures. For example, based on data provided by the Midwest Real Estate Data (MRED) service for real estate agents in the Midwest, the closing price of a property in February 2017 was on average 97.1% of the last listing price of the property.With the demand for real estate increasing, this percentage has grown steadily over the years.In comparison, this ratio was lowest in Feb 2012 at 94.1%.
Does that seem confusing? For the average consumer, it is. But that’s why you pay commissions to an experienced broker. It is our job to know what all this means and use the information to your advantage.
Online portals like Trulia and Zillow, as well as the county assessor’s office, provide estimated values of the property or estimated value ranges.Using just one of these resources may not be completely indicative of the property value, but using multiple resources and comparing the results should start to paint a clearer picture.
Another expectation from every real estate agent is the ability to produce a Comparative Market Analysis (CMA).Every real estate agent should be able to produce a good CMA that includes an analysis of past sales in the area. The CMA should include the condition of the home as well, something that online portals and the tax assessor are unable to consider.This is crucial especially for those properties that are in very poor or extremely good condition.While online portals and the county assessor’s office mainly focus on the rules of averages (property condition), CMA can really take into account the condition of the property and the value it adds or subtracts.
Possibly the most important consideration is what the property is worth to you.Being near a good school or your job can cause buyers to pay more for a house. Other factors like these include the desire to be near family or friends, or simply a love for the neighborhood. People will sometimes pay a small premium to get homes like this.And we see nothing wrong with that.The fact is that you will be spending a good amount of your life in the home and your family’s happiness is worth something.
Working with the right real estate agent who can point these things out is very important.Buying a home is not an easy process.It is usually one of life’s biggest investments. To have the best possible experience, it’s essential to work with an agent who cares about your goals.
Enterprise Realty Brokers was founded in 2006 with the simple objective of offering our clients the best real estate services available. We strive to help you locate and buy your dream home at the lowest price. We go the extra mile for each client to help them achieve their real estate goals. We’ve altered the playing field in real estate by focusing on technology and data to deliver the best services and great results to each client.
When you’re ready to sell and buy residential real estate in the areas of Cook, Lake and DuPage County, we hope you’ll give us a call. We have the experience to assist you in every way, giving you the advantage over other home buyers.
By Dan Cuckovic, Managing Broker/Owner, Enterprise Realty Brokers, Inc.
Enterprise Realty Brokers believes that people pay too much to list and sell their homes. With the housing market in full recovery, this agency is setting new trends and helping homeowners put more money back in their pockets.
Chicago, IL – March 6, 2017 – With the real estate market continuing to improve, real estate agents are finding it more and more profitable to get back into this sector working full time. Though people do choose to sell by owner, the majority go through a well-established agency so they can take advantage of the MLS listings.
One of the big reasons people cite for not wanting to list with an agency is the commission that can be as high as 6% of the sale price. On homes worth a lot of money, this amount can be significant. For instance, a homeowner selling at $500k will pay about $30,000 simply for the listing and buyer’s agent’s fees.
Dan Cuckovic, the managing broker and owner of Enterprise Realty Brokers, a Chicago-based real estate company, recently stated that, “Considering the real estate market today, sellers should never agree to pay more than 4.5% commission.”
Cuckovic goes over the top three reasons for this statement:
The Chicagoland market in 2017 is going to be a seller’s market. According to Midwest Real Estate Data service, the supply of real estate is at its 10-year low with only 4.2 months of supply available. Month’s supply chart indicates the number of months it would take to sell off the entire real estate inventory currently on the market without any new properties being added. Knowing this empowers sellers and gives them confidence that there will be a good to excellent demand for their property.
Smaller agencies can provide excellent services without large corporate fees. Large corporate and office fees that big brand real estate firms charge their agents drive the commission percentages upwards. Smaller, more specialized firms do not have these fees and their agents are at liberty to reduce their commission in order to obtain the listing, without sacrificing the quality of the services offered.
Everyone is online. This goes for sellers, buyers and real estate agents. The most important search tool for the homebuyer is the internet (according to the National Association of Realtors). 100% of buyers have at some point used the internet and it’s free to use.
Cuckovic also points out that websites like Zillow.com and Realtor.com offer free access and reliable information on all homes for sale in the Chicagoland area. Any buyer searching for a new home will use these or similar sites. Listing with any licensed real estate agent does put a home on the local Multiple Listing Service (MLS) network and it should show up on these and other websites. This service is expected to be offered by all agents, regardless of whether they are charging 6% or 3.5% commission. While there are other means to reach buyers (open houses, social media and email campaigns), online presence is crucial.
For homeowners, these reduced real estate fees are very good news; it’s money they can put back in their pockets. The question that remains is how to find those agents that are willing to offer full services at a discounted rate.
Cuckovic offers this advice: “Do your research online and use services like Upnest.com or Hungryagent.com. These websites have agents bid for your business, allowing you to interview and select the best agent at the most affordable price. In addition, approach your local family owned real estate firm and talk to them about discounting their fees. If you are also buying your next property after the sale and you are open to using the same agent to find your next home, it is highly unlikely that any agent will say no.”
Enterprise Realty Brokers was founded in 2005 by Dan Cuckovic. The company’s goal is to offer the best services possible to clients at the best possible prices. They strive to go the extra mile to help clients achieve their real estate objectives. They focus on helping clients sell and buy residential real estate in the areas of Cook, Lake and DuPage County. Enterprise has changed the playing field in real estate by focusing on technology and data to deliver the best services and results to clients.
Chicagoland Real Estate Market is hot. In evaluating the market performance in the first 60 days of the year, conclusive with March 1st 2017, I noticed the sellers are definitely in charge of the market. I analyzed data obtained by Midwest Real Estate Data (MRED), which compiles real estate data from the northern Illinois, parts of northwest Indiana as well as southern Wisconsin.
Below is the analysis of the most important points regarding the real estate market in the first 60 days of 2017:
In the first 60 days the level of market activity was 14,418 closed transactions. In comparison to the 14,630 closed transactions in the same period of 2016 this is a 1.47% decline in activity. In comparison with 2015, when 13,378 transactions were closed in the same period, this is more than 7.7% increase. The slight decline in activity in 2017 versus 2016 is mainly the result of the relatively low supply of real estate, which is below the 2016 and 2015 levels.
The average selling price continues to rise. In the first 60 days the average sales price in the MRED territory rose by 6.00%. While this increase is at the slower pace than the increase of 2016 in comparison to the increase in 2015 (7.61%), the increase is still solid. In my opinion the increase will continue to happen as long as there is a solid market demand and the supply remains low to moderate.
Average Market Time
Average market time at the end of February was 107 days which is 7 days less than the same period in 2016 and 11 days less than 2015. As stated, the low supply and good demand are causing the properties to be sold quickly.
In summary, the real estate market in Chicago remains strong and I anticipate that 2017 will be a solid real estate year. While there are many unknowns ahead of us (new President, likely increase in interest rates, etc.), I am confident that the homeowners have much to look forward to.
With over 10 years of experience in buying, selling and investing in real estate we promise you the best experience and a seamless process. Contact us today to start the process of selling or buying your home