The Number 38
If you’ve been following the market at all, you know that 2020 brought the first significant home value increases in the Chicago suburbs in five years. According to Illinois Realtors (the state real estate organization), the Chicago metro area saw a home value increase of 8.1% across the board in 2020 compared with 2019. Considering that the previous five years have been relatively flat, in terms of home value increases, that 8.1% increase is huge.
A lot of this has been fueled by the pandemic and people wanting to have more space, both inside and outside, as many couples and heads of households find themselves with two adults (or more) working from home.
So what’s with the number 38? That’s the number of clients I have who are looking to buy a modern home and haven’t found one yet, primarily because there’s very little on the market. December of 2020 saw only 60% as much housing inventory compared with December of 2019 – and the number of modern homes on the market is already a tiny subset of the available housing inventory anyway – (again, per Illinois Realtors), but demand is higher than it’s been for the last 5 years.
This demand is even greater for people who want to buy modern homes. With their open floor plans, large windows, and better connection with the outside world, more and more people are understanding that the ideas that made these homes so popular in the ’50s and ’60s are even more important today.
As a result, Illinois has finally caught up with much of the rest of the country in terms of valuing modern homes higher than traditional ones (all else being equal). We’re not at the same value ratio as places like California, but because well-designed modern homes represent a number of benefits compared with traditional homes, they’re selling for more, comparatively today than in the past.
Let’s look at what that means for you, depending on whether you’re buying or selling.
If you own a modern home and you’ve been considering selling, there has never been a better time to sell. The huge demand and drastically limited supply means that you’ll be able to sell your modern home for more now than you could’ve in the past. Of course how much more depends on many factors, which I’ve outlined in a document that I’ve been giving to my clients selling their modern homes for years. If you’d like a copy of that document, Modern Home Values Explained, please send an email to me at email@example.com and request a copy. I’ll be happy to send it to you, along with a document that outlines the selling process, which you may find helpful, especially if it’s been a long time since you’ve bought or sold a home.
If you are thinking of selling, please call me at 312.907.4085. You can tell me a bit about your home, and we’ll set up a time to meet at your house so that we can meet in person, I can see and learn about your home, and I’ll take some notes on many of the home’s details. I’ll also take some reference photos that are just for me, to assist, along with the notes, in putting together a market report for you so that we can get a sense of the appropriate price range for your home in today’s marketplace.
I recommend us meeting before you make any significant repairs or updates to your home, if you’re thinking of doing any, because which projects you undertake to sell your home likely should be done in a certain way to benefit you the most when you sell.
If you’re hoping to buy a modern homes, it’s important that you understand the marketplace, too, because it will greatly affect your success in finding, going under contract on, and closing on what could be your modern dream home.
The first thing to do is contact me and let me know the basics of what you’re looking for: Preferred price point, bedroom & bathroom count, and what towns or areas you’re interested in. I’ll have a few follow up questions, but those are the most important things I need to know initially.
Next is that if you’re planning to purchase a home with a mortgage, you MUST have a pre-qual document from your lender before we look at homes. There are two reasons for this, first of which is that all buyers are supposed to be pre-qualified before looking at homes, but more importantly is that because the market is so hot, you’re going to be facing competition from other buyers. If you’re not ready to put in an offer on a home you like right away, you’re going to miss out. It’s that simple.
If you don’t have a lender you like working with, let me know and I can refer you to somebody.
Note that if you’re planning to purchase a home with cash, you should have a Proof of Funds document handy that shows that you have enough funds in the bank (whether one account or several) to purchase the home.
Whether purchasing with a mortgage or cash, note that many sellers will not permit showings without me providing such documentation (pre-qual document or proof-of-funds), so keep that in mind, as it might be requested.
This probably sounds like common sense, but you also need to be able to be reached easily and need to be able to react quickly when new homes come to market that fit within the parameters of what you’re looking for. Please make sure you let me know the best way to reach you (email, text or phone) so that I can let you know when new homes come to market, but also so that we can talk about going to see them.
Because of the pandemic, there are instances where there might be homes that are on the market or are coming to market soon, but aren’t available to be shown for various reasons. The most common of these currently is older sellers concerned about safety due to COVID and not wanting a bunch of people in their homes. Unfortunately there’s no way around this as its the sellers’ choice on whether or not to show their home and to set restrictions, such as number of people who can tour the home, etc.
You should expect to sign COVID disclosures for many homes that you may want to see, and of course you must be wearing a mask at all times while in homes that we tour. I also recommend that people wear disposable gloves as well. And, I would expect to limit the people touring a home to just the people who will be signing the contract. If you want to bring other family members, such as kids or older parents, please let me know, because I may need to clear it with the seller’s agent.
If you’re out of town or out of state and want me to tour a house on your behalf, I’m more than happy to, and helped a number of clients last year purchase homes here who were in the same situation. In several cases, they never saw the house in question before coming to town for closing, so it’s possible, does happen, and may be your best option given the market dynamics these days.
You should also expect to be in a multiple offer situation as literally every modern home I sold in 2020 had multiple offers, with the exception of 1463 Northwoods in Deerfield, as my sellers went with the first offer we received before anybody else had a chance to put in an offer. This means that you may need to pay full list price or over list price to secure the home. There are other things you can do to make your offer more appealing to the seller, which we can discuss at the time, as much of that will be dependent on the specifics of the house and the situation.
What If You Want to Buy One of My Listings?
It’s not uncommon for a buyer client of mine to want to purchase a home I’ve listed for a seller client. While dual agency – the same Realtor representing both the buyer and the seller in the same transaction – is actually legal in Illinois, it’s a very bad idea for many reasons, and I have a policy not to engage in dual agency. As such, I always will only represent the seller for one of my listings.
However, if you’re a client of mine who’s looking to buy and you want to see one of my listings, I’ll be happy to show it to you, and if you’re interested in it, I can refer you to another agent who can represent you for the purchase.
Again, if you’re planning to sell your home, call me at 312.907.4085 so that we can have a conversation about your situation and your home, and set up a day & time to have an initial meeting at your house.
If you’re hoping to buy a modern home, use the form here to let me know what you’re looking for, and I’ll follow up with a few additional questions so that we can start looking.
And of course I’m always happy to answer general questions about the market, or specific homes that are available on the market.