Selling in Chicago – What's the Secret?
I love telling people that I’m a Realtor because I inevitable get the look of horror and dread, followed by the ever so popular question: “How’s that going for you?”
What most people don’t understand is that news you hear about Real Estate on the radio or on television often gives national accounts, meaning very broad overviews. National news doesn’t account for local news, and the truth is that the Chicago market has been one of the strongest despite the steep decline in comparison to other cities in the US. A recent report in Crain’s stated that more homes were sold in Chicago in May than a year earlier, marking the ninth month in a row of year-over-year gains. The median price also rose, up 2.2% to $230,000, from the same month last year.
Everyone knows that it’s a buyer’s market so usually people aren’t surprised to hear that I work with a lot of buyers right now. What people seem to dread is the thought of selling…
So what’s the truth about selling today? What’s the secret? With all those buyers out there, surely it must be possible to sell your place! Well friends, it is! There is no secret really. It has always been about pricing your place accordingly. In a seller’s market you can afford to take some risks here and there but in a buyer’s market, pricing is everything! There is NO room for error.
So here’s what sellers should expect: first, and foremost, expel anything subjective from the process. I know you paid X amount 3 years ago and have since invested $10,000 into the place but the truth is, buyer’s don’t care what YOU paid and the added improvements are certainly bonuses but won’t help the value of your home by much. When you decide to sell there are two things to consider (and they’re both related): what comparable homes are selling for and what buyers are willing to pay.
Ideally, Realtors should do a comparative market analysis IN ADDITION to compiling data from Agent Metrics, a software program that pulls information directly from the MLS. Agent Metrics will give you a breakdown of how many comparables are on the market in each month, how many places have sold each month, what the median price has been each month, and will help you pinpoint a very specific price point to be in.
I am working with a seller in Evanston right now who would love to sell his one bedroom that he paid $240K for in 2006. The sad news is that in today’s market, there are roughly 122 one bedrooms for sale in Evanston between the price range of $100k and $300k. In the month of June alone, only 8 have sold and 6 are under contract. That kind of supply and demand means it would take approx 10 months just to clear out the current inventory. The median price range for SOLD homes is between $170k and $180k. So if you aren’t in that price range OR below – you ain’t gonna sell! That’s a tough thing to wrap one’s mind around – especially given the purchase price 4 years ago!
Point is – selling isn’t going to be for everyone. Chances are, if you bought between 2006 and today, you stand a chance to lose money on your property. So if you don’t HAVE to sell, then don’t! If you bought prior to 2006, you might break even or make a small profit. The bottom line? If you find yourself in a situation where you HAVE to sell, look at the market data provided to you by your Realtor and make sure that you price appropriately. I always tell people the following: I feel confident that I could sell your place; there are plenty of willing buyers out there.
The question is, are you willing to trust me and do whatever it takes?
