Q: How do you see people reacting to the fact mortgage rates are still low?
A: The majority of the buyers that are “school sensitive” are out of the market right now because their kids are in school. They’re more tied to the school season and may not be active again until the spring or summer for planning reasons.
We are suffering from relatively low inventory overall. A lot of people were looking last summer in Chicago and couldn’t find what they were looking for. It’s not an ideal time to sell something right now that’s wedged in near a great school district.
I had a two-bedroom condo in Lakeview earlier this fall that sold in a week. But as we get into the dead of winter, most people won’t not sell in the middle of the roughest of seasons in the Midwest. First, the holidays eliminate a couple weeks, and then it’s freezing cold outside and no one likes to look at a property or show a property when it’s cold and wet outside.
We’re not necessarily talking desperation here in the winter. There will always be good finds if you look hard enough — like someone who got relocated for a job or already bought a new place and needs to sell their current home quickly. When you have a motivated seller, you’re more likely to get a better deal if you buy this time of year. The only negative is that there is less inventory to choose from. But if you’re looking for a deal, I would say this is a good time to buy.
Q: Any neighborhood sticking out to you right now in Chicago?
A: Pilsen is a hot one right now. For a new-construction condo, those prices are still up there a bit, but there is still some affordability. A lot of my younger clients are looking for a neighborhood that has more to offer than just high-end boutiques. They want something with more cultural diversity and smaller, local restaurants and shopping. Neighborhoods that have their own individual vibe.
And Pilsen has always had a great art scene, rich culture that’s still a strong influence, and personality. I think that’s why people are drawn to it, but it’s also a very convenient place to live being so close to Halsted, downtown and the expressway.
Q: What do you find that millennials and 20-somethings are looking for in terms of real estate these days?
A: With the increase of rental prices in virtually every neighborhood, a lot of th
at group is realizing that they can buy — and spend less than they would in rent in the process. Mortgage rates that are still near all-time lows help perpetuate that.
Younger buyers are very savvy. Lots of them are interested in two or three-bedroom or multi-unit buildings to rent out. They’re mindful of purchase price and payment and not overextending. They want to be in a comfortable position and not house poor.
There was more of a willingness from previous generations to go overbudget, but young people are more frugal now, even as earners with great jobs. They’re not willing to go out and buy 20 times more house than they need, instead doing a good job sticking with a budget and staying within a range.
To be honest, it’s probably a byproduct of knowing someone who got in trouble 10 years ago when the bubble burst, and they’ve learned and are doing their best to avoid that.
Also, while young people usually want to live in established neighborhoods, there has been a little bit of a migration west to Portage Park, Logan Square and Humboldt Park. It’s still relatively affordable for a condo in those areas compared to going east to Lakeview, Lincoln Park or Wicker Park, but they’re still a lot higher than they used to be, meaning a lot of these young buyers are stretching to the western boundaries to find a home.