As Chicago shakes off brutally cold temperatures in the coming weeks, home shoppers, sellers, and their agents are expected to get back into the market and start closing real estate deals. But low inventory and high demand, coupled with new changes to the tax code, means that buyers entering the market this spring are likely to face stiff competition for coveted properties in hot neighborhoods while also facing new unknowns regarding tax laws.
In recent years, Northwest Side neighborhoods along the Blue Line have witnessed some of the biggest increases in value and stiffest competition among buyers. Budget-minded shoppers seeking a solid investment would be best served by exploring neighborhoods like Belmont Cragin and Portage Park, Kale Realty broker and hyperlocal blogger Eric Rojas suggests.
“The median price of a single-family home in Belmont Cragin is $240,000,” Rojas says. “It’s a quiet neighborhood and there’s a lot of inventory of nice brick homes, bungalows, and Tudors.”
Rojas also points out that turnover in Belmont Cragin and Portage Park is much higher than in areas like Avondale or Logan Square, where property owners continue to hold. When looking at single-family home closings in 2017, Belmont Cragin had 329 sales while Portage Park saw 441 sales, Rojas says. However, only 113 single-family homes exchanged hands in Avondale last year.
Agent Scott Curcio of Baird & Warner says that he has also witnessed strong demand for this region. “Portage Park and Jefferson Park have been doing very well in the last couple of years because there’s great inventory and great value and a lot to do out there,” he says. Curcio suggests that homebuyers will continue looking further west from Logan Square and Avondale in 2018.
In addition to a competitive spring market, Curcio also anticipates questions regarding the newly passed tax overhaul. Some recent reports predict that the new tax code may slow the rise of home values in the country’s priciest markets by scaling back subsidies. Curcio suggests that it may be another year or two until the industry finally understands how the changes will ultimately affect the home selling and buying process.
Instead, Curcio recommends buyers focus on lining up financing before the winter months thaw out and getting ready to compete against other buyers for properties. “Any homebuyer entering the spring market would be smart to tell themselves that they’re going to be in a multiple offer situation,” Curcio says. “Don’t run away from that—embrace it.”
Shoppers who already have financing and know exactly what they want are in a good position to make an offer when the right property pops up, he says. Of course, coming to the table with the best offer is the key to getting a home under contract.
“Buyers have to understand that this is a business transaction, so make your offer the most appealing from a business standpoint with price and terms,” Curcio says. “It’s all about how they position it.”