The real estate market has taken some big turns over the past decade, but consumer confidence is steadily returning. Discover how first-time and move-up buyers alike can find deals in today’s economy.
John Hartnett remembers just how difficult it had been to sell a house during the past decade.
“If it was a roller coaster, it certainly was a ride on the way down,” says Hartnett, a real estate broker for Baird & Warner, a locally owned independent real estate firm with 25 offices throughout the state. “We peaked, and now we’re starting to see the market rebound year after year in a way that’s more feasible. I was excited with the hype that came during 2014, but in 2015 that hype became real. People are buying and selling. It’s an exciting time to be in real estate.”
Unlike the past, there’s a different mood among buyers, sellers and builders. First-time buyers are becoming more active, interest rates are low and a more stable economic situation has generated a positive outlook for many.
“If you have a good home on the market for a good price, you can expect multiple offers,” says Jim Haisler, CEO of Heartland Realtor Organization, an association of real estate agents in McHenry County. “The homes over $300,000 are moving slower, but the good news is that they’re starting to move. Some of the homes over $500,000 are finally starting to move.”
According to the Illinois Association of Realtors, statewide home sales (including single-family homes and condominiums) this May totaled 14,980 homes, up 5.6 percent from the previous May, when 14,187 homes were sold. Forty-nine Illinois counties reported sales gains over the previous year, with McHenry County sales rising 14.2 percent, and DuPage County sales growing 10.4 percent. Kane County reported an 18.4 percent gain in median home prices, at $213,000.
Another positive sign is the fact that mortgage interest rates remain at some of the lowest levels since data was first recorded in 1971.
“I’m very optimistic,” says Nate Amidon, director of sales for Shodeen Homes, based in Geneva. “There’s some natural urgency in the marketplace. People are starting to feel interest rates will go up again in the near future. With rising costs and rising rates, they feel now is as good a time as any to make a move. We’re going to see continued steady growth in new construction. There’s still pent-up demand as first-time homebuyers return to the market, which frees up a lot of people to move. Overall, it’s been steady, which gives us a long-term confidence that we haven’t seen for quite some time.”
Real estate agent Hartnett agrees. “You know the old adage that it’s a buyer’s market or it’s a seller’s market? I feel like it’s almost both,” he says. “The reason I say that is there’s not a ton of inventory in the market right now, which is causing it to be more of a seller’s market. But if you look at the interest rate and the programs in place for buyers, it’s making the home more affordable. It’s advantageous to sell your property and expect fair market value, if not a little bit higher.”
This past May, it took an Illinois home about 72 days to sell, on average. That’s slightly faster than the 75 days reported a year ago.
“There are more buyers in the marketplace, but there’s also less inventory,” says Amidon. “In years past, we’ve had eight to 10 months of supply at one time, and that supply has been down to three months. It’s back up to four or five months of supply, but we’re still undersupplied in homes, which is creating opportunities for home building. We’re staying the course with our inventory plans. We have only a few homes that are 100-percent completed because they sell so quickly. We’re confident that it’s going to trend in the right direction.”
Although real estate professionals remain optimistic, the market still presents some challenges. One of the biggest obstacles facing developers is finding labor crews.
“The downturn lasted so long that many construction workers went onto new careers or moved away,” says John DeWald, developer of Serosun Farms in Hampshire. “The challenge for builders is finding framers and other craftsmen. We’re scrambling and putting crews together. For example, we needed three paint crews to finish up our model home. It’s a challenge, and it’s going to affect construction schedules. We’re not able to perform as quickly as we’d like to, but if crews aren’t available, we’re going to have to wait for crews to come off other sites. Hopefully, people will migrate back to these jobs in the next year or two.”
New Kind of Home
DeWald is a patient man. In 2009, he started Serosun Farms, a 410-acre property near Hampshire, located four miles west of Illinois Route 47, with room to build 114 residential properties. He designed one model and waited for the economy to turn around before proceeding with road construction and home building.
“We were waiting and not pushing too hard before the market came back,” he says. “We didn’t want to build too much infrastructure and have it sit like other Chicago developments have in the past five years. It was a frustrating start, but I’m feeling much better now. There’s a lot more activity these days.”
When it’s complete, Serosun Farms will include 300-plus acres of preserved farm, open space and restored prairie, an equestrian center, eight miles of walking, riding and biking trails, a fully stocked fishing pond and a working organic farm. Serosun Farms is targeted mostly to retirees, equestrian enthusiasts and second-home families. Buyers will have a choice of custom-built homes, about 1,800 to 6,000 square feet in size, that are priced from $650,000 to $2 million.
“The market is there, there’s definitely an appeal and the pricing is in the range that’s acceptable for people,” says DeWald, whose sister, Jane Strickland, is a business partner and lives on the Serosun Farms property.
Visit the development this summer, and you’ll see the very first home. Dubbed “Swainson’s House,” this model is a high-performance luxury home that comes with innovative “green” technologies, sustainable and healthy design standards, and plush amenities. The house is named after a rare hawk, the Swainson’s hawk, that occasionally visits the farm to hunt in the hay fields and often perches in nearby oak trees.
“It’s a one-of-a-kind home,” says DeWald. “What we wanted to do with the Swainson’s House is demonstrate the look, feel and quality we expect with our homes, administering the technology and amenities that we expect at Serosun. It’s been a good experience to test technologies and learn from them. It’s been inspirational to start with traditional architecture that we’ve updated. We’re pushing traditional or updated American styles that fit the rural feeling.”
The 3,900-square-foot Swainson’s House is an updated American Foursquare design that boasts a wraparound porch, a grand indoor fireplace, a great room, gourmet kitchen featuring Sub-Zero and Wolf appliances, a bedroom wing on the first floor, a finished basement and a spacious second-level loft.
The home was built according to sustainability guidelines developed by Serosun Farms in coordination with Funke Architects, Kettlekamp Landscape Architects, CR Embassy Construction, Evolutionary Home Builders and Troste Design. The planning process happened over several years.
“That was another upside to remaining patient the past couple of years,” says DeWald. “It gave us time to create focus groups and come up with a new way of doing homes.”
Swainson’s House takes the sustainability lifestyle to a new level, with an ample amount of energy-efficient windows; geothermal heating, cooling and hot water heater; automated energy recovery ventilation; water-efficient plumbing fixtures and high-efficiency lighting. DeWald predicts that many of the building practices used on Swainson’s House will someday become the standard for home construction.
“Just because it’s a sustainable home doesn’t mean you’re giving up luxury,” he says. “We’re seeing a shift in marketing and going beyond green. You can have a very luxurious home but still live in a smaller environmental footprint.”
The recent uptick in home building was the reason Shodeen Homes, which has been building homes in northern Illinois for nearly 55 years, decided now was the time to add two more properties to its extensive portfolio.
The first new development is the Seventh Street Terrace Townhomes, a community of six upscale residences planned for the northeast corner of Seventh and James streets in downtown Geneva. Shodeen’s fifth downtown residential property, this new community joins the nearby First Street Duplexes, Dodson Square Townhomes, Dodson Place Residential Apartments and River North Condominiums.
“We felt the timing was right to build a property that didn’t cost $800,000,” says Amidon. “It’s more of a lifestyle change for people living in downtown Geneva.”
These new townhomes come in two designs: the 1,923-square-foot Verona and the 1,980-square-foot Palazzo. The three-level designs each come with three bedrooms, two and one-half bathrooms, and an alley-loaded attached two-car garage. There will be a finished lower level that can be used as a home theater or media center, workout room, a hobby room or home office.
All residences will have nine-foot ceilings on the main level and vaulted ceilings on the second floor. Hardwood flooring is spread throughout the first floor, while full bathrooms will have ceramic tile. The gourmet kitchens will include custom cabinetry, along with upscale stainless steel appliances and granite countertops. The exteriors of these traditional-style townhomes will be covered in brick and Hardie fiber-cement siding.
“It will have all the bells and whistles,” says Amidon. “The price is right in the low $400,000s.”
Outside Geneva, Shodeen is also opening the Rowhomes of Fontana. The new development has a total of 18 townhomes, is designed similarly to the Geneva property, and will be built in downtown Fontana, Wis., near Geneva Lake.
“Having a piece of land located in the heart of downtown was appealing in and of itself,” says Amidon. “It’s the perfect location to offer something unique for people looking for a lake home.”
Amidon expects both projects to be completed by the end of the year.
Fulfilling the Dream
While most experts agree the housing market isn’t totally in the clear, the good news is things are finally looking up. And that’s reason enough to celebrate.
“Home ownership gives you a sense of pride,” says Baird & Warner’s Hartnett. “It’s rewarding, as a real estate agent, to be at a closing and to see the emotion that goes into every transaction. When I sold my property, I felt like I was selling a part of myself. There’s a lot of blood, sweat and tears that go into a property, and that’s true for a lot of homeowners. There are so many memories, friends, relatives, holidays, parties and graduation parties in every home.”
And now, with the economy steadily improving, first-time buyers are making the leap and putting their own dreams into our neighborhoods.
“I recently sold property where my client lived there for 46 years and raised two children,” says Hartnett. “A young couple bought it with big dreams, hopes and expectations, which is great. Owning a home brings not only a sense of pride, but a sense of knowing that you’ve accomplished something pretty special.”