Buyer's Market: Those looking for a home in Kane County can get more for their money
In Leslie Ebersole’s experience, most families don’t own more than two cars or have a need for that much garage space dedicated to vehicles.
But the demand for three-car garages remains as high as ever, said Ebersole, real estate broker at Baird & Warner Real Estate’s St. Charles office.
“Some people actually need the space for a third car, but most don’t,” Ebersole said. “What they want is the space for all their stuff – bicycles, sports equipment, tools, you name it.
“And all I can tell you is that, for whatever reason, by a huge factor, it is so much easier to sell a house with a three-car garage than one with just room for two.”
Ebersole and others in her line of work say home buyers may never have a better opportunity to grab that extra garage space as well as the oversized kitchens, enhanced bathrooms and other premium housing perks.
“No one’s saying you’re going to get something for nothing,” Ebersole said. “But if you can get the credit, then this market can certainly help you get the most house for the credit that you can.”
For decades, home buyers in the Tri-Cities and elsewhere in the Chicago area bought homes with the expectation that the value of their real estate and its assorted improvements would go up.
Home prices in the Tri-Cities inflated quickly in the 1990s and early to middle years of the past decade. By 2006, the median home price in each of the Tri-Cities had surged to between $337,000 and $410,000, according to local market data supplied by the MainStreet Organization of Realtors, a trade group representing real estate agents in the Chicago area.
That confidence in a return on investment quickly cratered for many homeowners in the past seven years when years of sustained high unemployment, waves of home mortgage foreclosures and economic stagnation caused home values to plunge.
By 2012, home prices in the Tri-Cities dropped about 16 to 27 percent. The median sale price in Batavia – the price at which half the homes sold in that year sold for more and half for less – had fallen to $245,500, while in Geneva and St. Charles, the median sale price had dropped to $314,000 and $307,000, respectively.
In recent months, the market has shown increasing signs of stability, with home prices increasing slightly compared to 2011.
In November, for instance, the median sale price in the Tri-Cities held steady from 2011 to 2012. And in December, the median price increased about 21.7 percent, according to data from the MainStreet organization.
“I think we hit the bottom a while back,” said Michael Parent, broker manager for the Coldwell Banker office in St. Charles. “Now we’re either holding steady or moving back in a positive direction.”
That, said Ebersole, Parent and other local real estate professionals, means many of those looking to buy – and with the ability to finance their purchase – are stepping off the sidelines and seriously looking for their next home.
And many of these buyers are discovering their purchasing power stretches further than it has in years.
Jeff Cadwallader, a real estate broker with the Cadwallader Group of Geneva, said in many instances, a buyer can expect to get anywhere from 3 to 10 percent “more house for the money” than they could have two years earlier.
He noted that a house he recently listed in Mill Creek for $291,000 had sold two years ago for $10,000 more.
“We’re seeing things like that across the board,” Cadwallader said. “Buyers are looking for deals, and they are out there.”
Ebersole noted real estate operates under a general understanding that homes that sold in the mid-2000s should sell about 30 percent less now.
That does not necessarily mean that buyers should expect to get a four-bedroom house today for the price of a three-bedroom home in 2005 or 2006, she and Parent said.
Even if buyers could obtain the same amount of financing today as they could seven years ago, that does not mean they will move up to a different housing category, the real estate agents said.
But buyers should expect to receive more extras with their purchase than they would have netted in years past.
“You’d still be within the same housing category,” Parent said. “But now you’re talking about getting that brickwork on the front, a three-car garage, a full, finished basement, or even a mini-estate lot, depending on where you buy, for the same money you would have paid for a house with none of those things just a few years ago.”
While buyers entering the market today can expect to be “choosy” when it comes to the desired amenities, agents said buyers should not think they can take their time.
They noted homes are selling faster than in years past, and sellers of desirable properties are fielding multiple offers if the home is priced correctly.
“This isn’t a market to go in and lowball any more,” Parent said. “You can’t wait forever.
“But if you come in financed, and are a little more aggressive, you can walk away with a great home for a pretty good deal.”