Many people like to start off the new year with resolutions. Full of hope and promise, they join the gym, throw out the junk food, stock the fridge with vegetables and vow to turn off the television and read more books. While the success rate of these resolutions varies widely, each new year continues to offer that same hopeful feeling of a chance at a fresh start.
A fresh start for the real estate market seems to begin with the promise of good things to come. And many local professionals tied to the Oak Park and River Forest housing market are optimistic that 2013 will offer some welcome changes.
John Lawrence, owner and managing broker of Weichert Realtors-Nickel Group, says that he sees some changes in the pipeline for the national market that will likely be reflected at the local level.
"One of the things I've seen nationally is a lot of bank-owned properties and short sales. I think this year will see foreclosures decrease and short sales increase."
Lawrence says he remains in contact with colleagues in the banking and mortgage lending fields and his sense is that banks will be eager to take more steps to approve short sales, rather than letting them fall into foreclosure.
"Banks want to get these properties off their books," he says. "They're going to be offering more services to get the distressed properties taken care of through short sales rather than waiting until foreclosure.
"Locally, about 25-30 percent of Oak Park, River Forest and Forest Park properties are still distressed in some manner, and most of the distressed properties, whether we're talking foreclosures or short sales, are in the condo and attached dwelling markets. This area is going to continue to see some pressure."
Jane McClelland, co-owner of ReMax in the Village Realty, believes that higher home prices are on the horizon.
"I believe we have already hit bottom as to housing prices," she says. "I predict that many buyers will experience multiple offer situations and that prices will start creeping up."
Lawrence agrees with that assessment, noting that single-family homes, particularly in Oak Park and River Forest, should see good growth in sales and price. "If priced right, these homes will go quickly. There's a pent-up demand out there."
Industry experience tells Lawrence that the pricing side of the equation is bound to get better. "People who aren't in this day to day don't see that prices are really a trailing indicator," he adds. "Low interest rates, low inventory and a sales-versus-list-price percentage that is going up are all key leading indicators that the market is returning to health. Prices will follow."
Buyers jump back in
Both Lawrence and McClelland see the upsurge in homebuyers as key to a more robust housing market. According to Lawrence, an overwhelming percentage of renters say that home ownership is something they want.
"A lot of the late 20's to early 30's-age group has been sitting on the sidelines since the recession. A lot of these people will buy when they feel comfortable with their employment picture. I think a large portion of this population will buy in the next year or two."
McClelland predicts buyers jumping back into the market because the timing is right. "Buyers won't want to admit that they missed the bottom of the market," she says. "That's what many of them were waiting for."
Local developer Paul Wicklow, of Wicklow Development Group, said he predicts the new year bringing better neighborhoods.
"I see a lot of cleanup of homes that were in foreclosure or homes that were short sales. I've got a lot of those projects right now, turning homes around."
Renovation of existing homes are also sure to increase with the economy. "Many people want to reinvent their own homes rather than buy new," he says. "There's a layer of comfort, plus they don't end up displaced."
Tom Sundling, owner of Oak Park-based Thomas Patrick Homes, says he foresees a renewed interest in home remodeling projects as well.
"What I've seen in the past two years is a lot of people who were considering a remodeling or rebuilding project but who were on the fence are now getting off the fence and actually getting into the permitting and construction process. I haven't seen anyone get off the fence and decide not to do a project. From my end, we may not be going like gangbusters, but it is encouraging."
No matter what the future holds, many industry professionals believe that the local housing market is poised to do well.
McClelland cites figures showing that nationally there exists the lowest housing supply since September of 2005. "Locally, we're experiencing a low inventory of single-family homes," she says. Combined with an expected increase in first-time buyers, she says, "This typically would indicate a sellers' market."
"Getting the fiscal cliff resolved is going to give buyers and sellers more confidence," adds Lawrence. "Another important point is that Oak Park, River Forest and Forest Park are still very desirable places to live. We've got great schools, a great community and a diverse housing stock. I think 2013 is going to be a great year."