Michigan Avenue - Niche Media - Michigan Avenue magazine is a luxury lifestyle magazine centered around Chicago’s finest people, events, fashion, health & beauty, fine dining & more!
Issue link: http://www.ifoldsflip.com/i/335804
T he cha llenge of scheduling show ings around vacationing sellers and buyers usu- ally makes the summer real estate market more laid-back than the frenzied spring. But not this year—especially for luxury properties, and for some sur pr ising reasons. Ba ird & Wa r ner broker Sher r i Hoke a nd Berkshire Hat haway HomeSer v ices KoenigRublof f Rea lt y Group broker Francesca Rose give us the inside story. What's impacting the market right now? Francesca Rose: In Chicago, there's a low bar- r ier to ent r y for inter nat iona l buyers. So now local buyers are getting a lot of competition from abroad, especia lly t he French, Ch inese, a nd Indians. They face tax or stability issues at home a nd see t he va lue of ow ning second or t h ird homes or investment property here. Sherri Hoke: Buyers were waiting for the market to hit bottom, then they were going to pounce. But they missed it. Even though year-over-year single- family home prices are up only about 12 percent in genera l, according to t he latest [CoreLog ic] Home Price Index Report, in the most desirable neighborhoods it's much higher. So now every- body's decided to buy at the same time because they realize prices aren't going to go back down. What's different about this year's tactics? SH: Bidding wars have gone a step further, and buyers are using escalation clauses [which auto- matically boost a price by a set amount in a tied t ra nsact ion] to beat t he compet it ion. But so many listings are sold before they hit the MLS. How does that happen so frequently? FR: We're all networking like never before to ful- fill demand, so we let other brokers know what our clients are looking for. Technology, and new websites like the Top Agent Network, makes this possible. So new proper t ies get show n—a nd sold—before they're listed. What does that mean for pricing? SH: There was a cost to wa it ing. I had client s who kept getting outbid last year, so they rented in R iver North. But now prices are up between 15 and 20 percent, and they're priced out of the market. Homes selling in West Town two years ago for around $800,000 are now priced between $900,000 and $1 million. FR: I'm seeing pricing that's close to, if not higher t ha n, what we saw before 2 0 0 8. T he per fect example is 600 North Fairbanks. I had a listing there; the deal fell through; we put it back on the market for $25,000 more. It sold immediately. Where are prices rising the most? SH: The developing areas surrounding down- town. R ight now, homes often go above ask in R iver North, and in the West Loop, which has been the least overvalued area, prices are rising quickly. Nobu Hotel and Restaurant and Soho House are coming to the area. Google is about to open a new office there. John Buck just bought t he headqua r ters of H 2 O Plus a nd he m ight build up to 500 residential units there. FR: Buyers are looking farther out in every direc- tion. Even Logan Square is becoming expensive. Now Smith Park is like Logan Square. Hipsters and young families are heading there. Millenni- als want to work, live, and play in the same area. Francesca Rose, Berkshire Hathaway HomeServices KoenigRubloff Realty Group, 2301 N. Clark St., #202, 312-350-4900; koenigrubloff.com. Sherri Hoke, Baird & Warner, 737 N. Michigan Ave., 310-909-4550; bairdwarner.com MA Hot Sales in the Summertime Despite summer sojourns, the real estate market is still mirroring the weather. by lisa skolnik top: The view from 600 north Fairbanks. above: Francesca Rose (left) and sherri Hoke 146 micHiganavemag.com brokers' roundtable