Housing recovery gathers momentum, but trouble spots remain
Zeke Morris, president of the Chicago Association of Realtors, is breathing easier these days. He’s confident the recovery under way in the housing market will continue to strengthen, but he notes problems persist.
He sees promise in a report released Monday by the Illinois Association of Realtors that showed inventory levels have plummeted, a continued rise in prices and sales at the best level for March in five years.
In the city of Chicago, the inventory of homes for sale sank 45.6 percent in March from a year earlier, and in the metropolitan area, inventory dropped 40.6 percent.
It’s “a good indication that we’re working through a lot of the distressed property in the market,” Morris says.
“Because inventory levels are down, we have the ability to put more qualified inventory in the market — inventory people are selling because it’s a good time to sell as opposed to selling because they have to sell.”
The report showed sales of single-family homes and condos in the city rose 13.8 percent to 1,894, the 21st consecutive month of year-over-year gains. The median price rose 9 percent to $187,500 — the sixth straight month of annual increases.
Throughout the metropolitan area, sales jumped 18.1 percent to 7,914, and the median price edged up 2 percent to $155,000.
Still, a sizeable slice of the homes sold were foreclosures, and prices remain well off their peak.
“The downtown market is starting to recover,” says Morris, a more than 20-year industry veteran who is operating principal and managing broker at Keller Williams Realty in Hyde Park. “We are starting to see cranes go back up. Projections are for 3,000 units to be built this year, 3,000 next year. Those are good signs. Some of that is rental, which means investors are willing to take risk. If investors are in the market, they will help push prices up.”
But condo problems remain when you look outside downtown, Morris says.
“When you move into some of the neighborhoods where the units were not properly run or the developer walked away, those guys are struggling for survival,” he says. “You’ve got them all over, people struggling in Wicker Park, in South Shore. They have not aggressively taken care of their defaulters.”
Many condo associations have to be rebuilt before condo units can be put up for sale — units that would enable would-be buyers to get financing, he notes.
Looking forward, he’s not expecting the market to go from bust to boom.
“Between now and September, I think you’re going to see gradual increases each month [in sales and prices],” he predicts. “I don’t think it’s going to just take off, but I think it’s going to be steady.”
His business is averaging 35 closings a month this year, up from 25 a month last year and well above the 15 a month it did during the worst of the downturn, he says.
The housing market crash led to consolidation and took out many players, he reflects. Indeed, Morris operates the last remaining Keller Williams site in the city, down from six offices.
Morris, who began operating under the Keller Williams banner five years ago serving South Side neighborhoods, says at its peak the office had 200 agents. It dropped to as few as 60 agents when the market tanked as many fled from the South Side to the North Side to do business.
“Their price points were holding on the North Side far better than we were,” he explains.
His business is back up to 93 agents now.
What has been the key to its survival?
“Consistently making ourselves available in the neighborhoods, making sure that we do whatever we can do to improve our ability to service people,” he says.
Cost cuts also were key, he says. His business went from a staff of eight to three.
“That has been he way everyone has survived,” he says. “We’re at a point where we’re starting to add back on.”
And hope springs eternal this year.
Agents are “coming out to training, reengaging,” Morris says. “There’s a lot of optimism in the market from the realtors. They’re busy. What I’m getting across the board is that they’re excited about what’s going to happen in the spring and summer.”
Photo by Brian Jackson