Category: Market Insights

5 Real Estate Pricing Myths Sellers Need to Know

Posted on January 6, 2020 by in Market Insights

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When it comes to selling homes, the price is very often the “hot topic” whether you are the seller or buyer. The process involved in determining the appropriate listing price isn’t always what one might think, though.

In fact, it ultimately comes down to a position within the existing competition. Let’s take a moment to delve into some common misconceptions about pricing…

Overpricing isn’t a big deal since you can always lower the list price

No homeowner wants to leave money on the table. But starting with an unrealistic or overly-ambitious asking price isn’t the way to achieve the highest possible sales price for your home.

In fact, overpriced homes tend to linger on the market, making them harder to sell. And yes, you can always lower the list price but you should keep in mind that the largest pool of buyers sees your home within days of it hitting the market – and if you keep reducing the price, they may assume there’s something wrong with the property. Buyers also factor in market time when determining their offer price and what they perceive to be fair market value.

To generate maximum exposure and interest, it’s essential to price your home accurately during that critical “New Listing” period.

Your home is worth the amount you paid (or more)

Every market is different and trends vary block by block. The market shifts constantly which can lead to upward and downward price trends.  However, just because a high-level report shows an increase in pricing, it doesn’t necessarily mean that trickles down to every property.

While all homeowners wish to make a profit, it’s important to be mindful of pricing trends in your hyper-local market. In sum, what you paid for the home and the period of time you owned it do not necessarily impact the list price. As mentioned above, it actually comes down to how you are positioned (price-wise) amongst the current competition.

Your neighbor just sold their home for $X, so you can sell yours for $X too

Like we said, trends vary block by block – but even homes on the same block vary in price. Every home is unique, and beyond location, you’ll need to consider other property attributes such as features, condition, and other criteria that affect the price. Maybe one home has a finished basement and the other doesn’t, or one has 4 bedrooms and the other has 3 – these are all factors that go into pricing a home.

A lack of inventory means you can be aggressive with pricing

Supply and demand vary by location, product type, and price. If homes in your sub-market are flying off the shelf, you might be able to be more aggressive in your pricing strategy, but if you live in an area that doesn’t see a lot of activity, a more conservative pricing strategy will serve you better.

Renovation costs should be added to the price

While renovations can add value to your home and help your home sell faster, you shouldn’t automatically assume that you will recoup all the costs for home improvement projects (i.e. kitchen and bath remodels or a new deck). Consult a local real estate agent to learn which pre-sale renovations will maximize the value of your property.

At the end of the day, setting the right listing price right out of the gate is crucial when it comes to generating interest and top dollar for your home. So, if you’re a seller, how can you be sure to do that?

Here at @properties, we leverage our exclusive digital Comparative Market Analysis (CMA) tool, which helps determine the current value of your home based on factors like market activity and comparable properties. Here’s why a CMA helps sell your home.

For more information on pricing or to receive your own CMA, click here.

The Emergence of West Loop Luxury

Posted on December 19, 2019 by in Chicago Luxury Real Estate, Market Insights, New Luxury Buildings, West Loop

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Perhaps no other Chicago neighborhood has seen such an explosion in new development in the last decade as the West Loop. The neighborhood’s transition from a warehousing and meat packing district to a luxury live-work-play destination has produced Michelin-starred restaurants, multi-million-dollar home sales, and the arrival of Fortune 500 companies, including Google, McDonald’s, and many others.

But what is it like to actually live in the area? And what should buyers look out for when considering this downtown neighborhood?

“It’s a great place to work, a great place to live, it has a fabulous elementary school, awesome transportation, great food, and actually a couple of decent parks,” says @properties co-founder Thad Wong in his conversation with Mike Golden in the latest @/The Market installment.

And with rising land and construction costs, we can expect to see prices for new construction continue to climb in the neighborhood, Golden adds.

“I think because of the infrastructure, because of the restaurants, and because of the vibe of the neighborhood, we can start to see the push in pricing as high as we’ve seen in other neighborhoods,” Golden says. “I don’t know if it’ll match some of the top, top tier, $1,200-per-foot pricing yet, but it’s going to be a pretty spectacular neighborhood over the next decade.”

Managing broker George Schultz adds some context, offering an early look into EVEQ, a new, condominium development featuring larger floor plans at relatively moderate prices for new construction.

“What we have at EVEQ and in the West Loop that seems to be the hot product is having three or four bedrooms on one level,” Schultz says, contrasting the plans with traditional townhomes where the living is more vertical. “This allows for a flexible lifestyle where you can work from home, be a single person and have great entertainment space, and you also get a lot more outdoor space.”

Hear more about the burgeoning Fulton Market and West Loop in the video below.

The Future of Gold Coast Luxury Real Estate

Posted on December 17, 2019 by in Chicago Luxury Real Estate, Gold Coast, Market Insights

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Sales numbers from the last few years paint the picture of a down market in the Gold Coast – the upscale lakefront pocket that has long been known for ultra high-end condos and co-ops. But another evident trend that sales reveal is a wide gap between new construction and existing housing stock, particularly in dated inventory.

While new construction in the Gold Coast now can hit $1,200 to $1,300 per square foot, a lot of the inventory in ‘last generation’ buildings will be priced at half that level, and older condos will sell for even less.

However, a variety of options and slow sales can present an opportunity for buyers who are willing to put in some sweat equity, says Rick Sobin, managing broker and VP of Brokerage Services for @properties.

“A lot of people are seeing great opportunity in large units with good pricing, who are [then] able to gut a unit down to the studs, start over again, and when it’s finished, end up with a very well appointed unit at a price point with there still being an opportunity for a profit.”

And for the new construction side? Expect to pay top dollar. The cost to build in this exclusive neighborhood is some of the highest in the region, says @properties co-founder Thad Wong.

“The land value in the Gold Coast is the highest in the city,” Wong says. “You’re not able to build anything in the Gold Coast for under $1,000 per square foot.”

What does all of this mean for the Gold Coast market in 2020? Tune in and listen as Rick Sobin, Thad Wong, and Mike Golden offer their insight and predictions for the coming years.