Northbrook Home Sales Show Conflicting Trends

Buyers, sellers and real estate agents must resign themselves to a continued bumpy residential market in Northbrook, with no clear sign of a permanent upturn in home sales.

Statistics compiled by Midwest Real-Estate Data (MRED) show seemingly conflicting or contradictory trends in sales. One aspect of the data is clear, however—home prices are not yet ready for a turnaround.

During the month of July, single-family home sales—covering detached houses, connected townhomes and condos—were up 30.2 percent from July 2010, but 11 percent lower than June 2011.  Year-to-date sales, through July, were 8.3 percent down compared to the comparable year-to-date period of 2010. The market has yet to work through a massive number of foreclosures and short-sale (a sale price that's less than the total mortgage owed) properties competing with conventional, non-distressed homes.

“We keep hearing about the shadow inventory that’s out there,” said Marsha Schwartz, a 27-year veteran broker in the Northbrook market who is now affiliated with Coldwell Banker. “There are more short-sales and foreclosures to come on the market that haven’t come on yet.

“The other issue is inventory—the number of homes that are for sale. The total inventory property in July is down 6.5 percent from June and down 28.7 percent from July 2010.  People are holding their house off the market unless they need to move. You may be waiting for a good amount of time ‘till the market turns around.”

Waiting isn’t always the answer

But he or she who hesitates could be lost. Those who worry about losing value on their home might end up in worse position by waiting, according to Natasha O’Connor, managing broker of Northbrook’s Prudential Rubloff agency.

“It may be a mistake not to put their home on the market,” O’Connor said.  “They should do it now.  We can’t promise anything, but we’re going to competitively position your home.”

Prices have continued their downward trend, according to MRED statistics.

For July, the median sales price for a Northbrook home was $378,750, down 10.9 percent from July 2010, when it was $425,000. Average sales price was $436,604, up 1.5 percent from $430,085 in July 2010.

But prices vary from neighborhood to neighborhood in Northbrook. And some home buyers may accept a seller’s firmer price if they want a specific location, because of a certain school district or access to transportation, rather than going through the more convoluted and time-consuming process of navigating a short sale or foreclosure.

Four-bedroom homes move

“In Northbrook, we’re known for having a lot of four-bedroom, 2 ½-bath, two-story homes,” Schwartz said. “If they’re in a good location, priced right and staged right, they’re selling.

“Condos move slowest. But there is still a market—first-time buyers, or somebody in a two-story home who can’t take the stairs anymore, should be buying.”

A more brisk sales environment should greet all parties with the August doldrums and the Labor Day weekend past. However, buyers and sellers should put on their blinders when it comes to national stories of a continuing home sales slump. That is a “macro” story that does not always apply to “micro” markets like Northbrook, real estate agents say.

“It’s dangerous to assume [conclusions] when the news is factored from [East and West] coastal areas,” O’Connor said.  “If you pull reports from each market, each is different. I tell my agents we’re within a certain environment, make the best of it, adapt to it.”

Schwartz cited a Harvard study that projects a future housing shortage—if builders and agents can hang on for several years.

“Population growth over the next decade will create a demand for nearly 1 million homes per year, above and beyond existing housing stock,” she said. “Builders are slow to respond because they’ve been burned so badly.”

The agents are showing and selling as before. But until that housing shortage kicks in, they have to adapt to a strange new world.

“We never anticipated this length of time,” Schwartz said of the housing slump. “The history of selling for more than a quarter century, we never had these issues.”