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Chicago Experts Offer Predictions For 2013's Residential Real Estate Market

Written by on Monday, 17 December 2012 6:00 pm
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Chicago experts gazed into the 2013 crystal ball and found good fortunes in building, renting and second homes.

Real estate industry marketing firm Taylor Johnson recently gathered anecdotal evidence from boots-on-the-ground Chicago real estate industry experts to provide a perspective on the 2013 housing market.

Forecasts from Windy City bode well for builders, general contractors, landlords and some select households.

Here's a sample of what they found.

Construction

• New home buyers could begin to feel the pinch in the incentives department as new home builders take up the slack left by short supplies in the resale market.

To meet the growing demand, new homebuilders, in October, raised the most new homes and apartments since July 2008, according to the U.S. Department of Commerce.

"Due to signs of improvement in the market, we've been able to back off on incentives and discounting at most communities. Buyers are not expecting as many promotions or deals as in the past few years," said Jeff Benach, co-principal of Lexington Homes.

• With home prices having nowhere to go but up, growing families are taking a hard look at newly built custom homes. The buyers include first-timers who want to go all in, skip the move-up step and ride the housing recovery.

"Most of our homebuyers are in their 40's with young kids. This group is willing to take the plunge and isn't going to settle. They want their dream home and are turning to custom builders to get it," said Dimitri Nassis, CEO of Tandem Architecture & Construction.

Second homes

• The second home market is re-emerging with investors and vacation homebuyers.

Also, low mortgage rates and competitive construction costs are ideal for current owners who want to improve their getaways.

"We're seeing an uptick in clients remodeling second residences, particularly city condos. While homeowners have saved on the buy side due to depressed condo prices, they are not holding back on investing in the most modern features and finishes for their second home," said Nassis.

Tenant, landlord

• Builders can't build fast enough to offset rental demand created by the owner-occupied housing market's financing and inventory squeeze. Continued week employment and little grow in wages are also fueling rental demand.

"People are still recovering from the recession and many won't feel secure buying until they have more confidence in the job market. For them, the flexibility of renting still outweighs any financial benefits of buying," said Tony Rossi, president of RMK Management Corp.

Renters are paying higher rents for sensibly smaller units, but enjoy more amenities. New rental buildings feature more common area space with outdoor pool decks, cabanas, entertainment rooms, and workout centers and where renters can stretch out.

• Absentee landlords are boosting the rental management business.

These landlords include rental property investors from abroad, homeowners forced to rent out underwater homes to save them from foreclosure, REO-to-rental property owners and others who just aren't cut out for property management, according to T.J. Rubin, managing broker of Fulton Grace Realty.

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  About the author, Broderick Perkins

Individual news stories are based upon the opinions of the writer and does not reflect the opinion of Realty Times.
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