As the world waits and wonders what will happen next with, well, everything, many curious eyes are glued to the real estate market. Will house prices fall? Is now a good time to buy? Will the demand for luxury homes decrease? So many questions.
In Illinois, real estate is considered an essential business during the COVID-19 outbreak. Like many businesses in recent years, the industry has come to rely more and more on technology using virtual tours and online documents to keep transactions moving even when they can’t meet face to face, and that has proved very helpful in these precarious times.
Chicago-based Compass agent Chris Laubach says, “Virtual tours that are posted on public sites are a fun way for lookie-loos to spend their time while they are stuck inside, but for us, the combination of a virtual tour and a pre-market listing helps serious buyers feel like they are getting a ‘peek under the tent,’ and a chance to get in on something sooner with more information than private listings usually make available. We think those buyers who are really ready to buy feel as if they can take advantage of this current situation.”
Using this private network of pre-market listings is proving very valuable for Berkshire Hathaway HomeServices Chicago agent Sally Mabadi’s clients as well. “We have a private network where we list homes before they go on the market and during the coronavirus, we have been using this more so that we can let people know these homes are — or will be — available. When we get inquiries from the private listing network, we can share the tools we have already developed — photos, floor plans, videos, flipbooks — so that buyers can get a good feeling for the home before booking a showing. Nothing can replace an in-person viewing, but we do as much as we can to recreate the experience virtually.” What it boils down to is people are still shopping and that is great news for agents — and falling mortgage rates are great news for prospective buyers.
According to Market Watch, mortgage rates recently fell to a 30-year low of just 3.33% due to the shelter-in-place mandate, which is down significantly from 3.8% at the start of the year (and a drastic change from 4.12% this time last year). Lower rates provide much better borrowing power that potential buyers will benefit from for years to come, so agents are finding that the search for a new home continues, but priorities are shifting.
“I’m anticipating that homes with more space and suburban areas will see an uptick. Especially because companies and their employees are realizing that they can successfully work remotely. If this trend sticks beyond the mandate and becomes the new normal in how many Americans work, you’ll see an increased shift to less dense areas because the commute will be a lower priority,” says Jessica Coulson of Engel & Völkers, a Chicago-based real estate firm.
Along with additional space and the potential shift to outlying suburbs, people seem to be adjusting their budgets as well — but perhaps not the way that was originally anticipated. “Buyers looking to spend under $1 million might feel better being maxed out at $850K, while those who could push $3 million in a cash deal might decide to get a loan so their cash is liquid,” says @properties agent Jena Radnay who specializes in luxury real estate.
But Radnay doesn’t think this should discourage sellers. “It’s crucial to keep your home on the market right now, knowing there have never been more eyes online. Rest assured, calls from fellow brokers are still coming daily with client inquiries. So yes, this is a time of uncertainty, no doubt, but everyone needs a place to live and fortunately, Chicago’s North Shore offers the best of the best in terms of schools, community and location.”
In fact, Julie Bradbury Miller, vice president and managing broker at Berkshire Hathaway Chicago, adds, “The silver lining for our industry is that the home is now more important than ever. This has been a time where many have taken stock of what is truly valuable to them and we are hearing and witnessing that home is top of mind. Even though we are all staying indoors to be safe and keep our friends and neighbors safe, as a collective community we are in many ways closer than ever. I believe that this will drive folks to make a move they have dreamed about and fine tune what truly works on an emotional and practical level for themselves and their families.”
How You Can Help
As you peruse the real estate listings, consider that many struggle to find safe, affordable housing. Here are some organizations to support that help give people the safe space they need.
- A Safe Haven Foundation
A Safe Haven provides housing for individuals and families whose lives have been impacted negatively by addiction.
- Center for Independent Futures
The New Futures Initiative helps families find housing solutions for their loved ones with disabilities.
- H.O.M.E. (Housing Opportunities & Maintenance for the Elderly)
This organization is is dedicated to improving the quality of life for Chicago’s low-income elderly, helping seniors remain independent and ensuring that they continue to be a part of their community by providing a variety of housing support services.
For more on homes, keep reading…
- How Healthy is Your Home? Expert Tips For Upgrading Your Space
- How Interior Design Businesses Are Going Virtual During the Coronavirus Pandemic
- Can’t Stand the Clutter? Here’s Why Joining the Minimalism Movement Could Change Your Life
Casey Gillespie is the editor-in-chief of SPACES magazine, but she doesn’t only write about design. Fashion, beauty, art, culture, luxury and wellness are favorite topics as well. Her work has been featured in Elle, The Telegraph, Furthermore, London Evening Standard, Haute Living, Sphere, Belmond, Modern Luxury and more. And when she is not pounding it out on the keyboard, you’ll find her hiking the trails in Marin County with her husband and French bulldog, Henry, or drinking wine and eating cheese. But probably drinking wine and eating cheese.