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For homeownership, the past few years since the burst of the real estate bubble have felt like an interminable road trip. Homeowners have taken on the role of the kids in the backseat of the station wagon held captive to the decisions of drivers they can't control. While the real estate market is analyzed constantly by experts — and non-experts — all we really want to know is if the worst is in the rearview mirror and the end of this agonizing trip is in sight.
The state of the local real estate market can be difficult to pin down. For a long time the bleak message seemed to be that prices and sales numbers were down, but there was a lot more room before everything hit bottom. Real estate experts were always hopeful that a market turnaround was just around the corner, while homeowners grappled with the realities of plummeting home values. While it's apparent that the local market is nowhere near back to the heady, pre-crash days, it certainly seems as if Oak Park may be headed for better times.
Statistics from the Oak Park Area Association of Realtors on single-family home sales during the first two quarters of 2012 show that the area is experiencing growth over the same period in 2011. During the first six months of the year, 176 single-family home sales have closed, versus 153 in the same period in 2011. Median prices are up too, settling in at $401,794 in 2012 compared to $371,982 in 2011. Also important to sellers, average market time has decreased from 150 days to 120.
John Lawrence, managing broker and owner of Weichert Realtors-Nickel Group in Oak Park and treasurer-elect of the Oak Park Area Association of Realtors, notes that these numbers translate into a 6.87 percent uptick in the sale numbers of detached homes.
"Just looking at May 2011 versus May 2012, market time is down 19 percent. In the first half of the year, market time was down 13 percent from the prior year," he says. "Instead of six months, homes are selling in five months, which can make a big difference for a seller."
Reaction from agents
Rich Gloor, broker/owner of Better Homes and Gardens Gloor Realty, says the recent numbers indicate rosier times ahead for the real estate market. "There's no question in my opinion that the market is getting better," he says. "I know that our office has been way, way, way ahead of last year."
Gloor says a number of factors play into Oak Park's recovery.
"There's lots of pent up demand from people who have been on the sidelines. Apartment rental prices are going up, so people are ready to buy. Oak Park's location is also helpful. Our location is so great, so close to the city and with great schools that people want to move here."
Even beyond the hallowed circle of Oak Park, realtors are taking notice. Real estate broker Eric Rojas works for Kale Realty in Chicago and blogs at The Chicago Real Estate Local (www.ericrojasblog.com) on market trends. A June 25th post touted Oak Park's numbers.
Rojas says he looks at the Oak Park market because many of his clients are interested in the village.
"Many of our clients are first-time buyers, or in condos in the city," he explains. "Oak Park is always in their top three choices of places to look for a home. A lot of people from the city move to Oak Park because of the diverse housing stock under $500,000 and the perception is the schools are better."
Rojas says Oak Park prices and sales numbers have gone up for two main reasons: affordability and consumer confidence. "[Affordability] is a trend in the best, most established neighborhoods. Consumer confidence hasn't been the best for a few years now, and it's starting to improve. People are buying houses that three, four, or five years ago they couldn't.
"Obviously, interest rates are good too, which plays into things. Prior to this, when interest rates were low, everyone wondered why more people weren't buying, but it took a long time for people to feel comfortable with the prices of homes."
Lawrence agrees that consumer confidence is playing a role in the uptick. "It's a combination of historically low interest rates and pent-up demand. We're not good at denying ourselves too long, and people always have a reason they need to move.
"The last two years, Oak Park single-family home sales have remained very stable as to median price, with only about a 1 percent decline from 2010 to 2012, so people are feeling some stability that they haven't had. They can now sell a starter home and move up."
Predictions for the future
While Lawrence sees the tide turning, he cautions against too much exuberance. "With a sample size like Oak Park, you have to be careful to say this is a huge trend. With that said, I do see things improving. We're starting to see properties actually sell in the upper brackets.
Last year, Lawrence adds, brokers weren't seeing a lot of movement in home prices over $1 million. Two homes went under contract at over a million in 2011 in Oak Park. Now, he says, "there's activity in that price point that we just weren't seeing."
Gloor insists that the local market is in full recovery mode. "There's no question that it is turning the corner and that it will be even better next year."
For his part, Rojas notes that he prefers to write about what is already occurring. "We don't predict any kind of trend that prices will keep going up, but what we do know is what's going on now. It looks good. You can take a guess that the neighborhood will continue to look good in the future."