If there is one thing real estate professionals are always prepared for, it is change. Ready to pivot at a moment’s notice, problem-solving mode is their default setting. Not even a pandemic can stop them from helping clients reach their goals; they just figure out another way to get the job done.
After the initial jolt and abrupt quiet COVID-19 caused in the real estate market, activity began to resume as client meetings and property showings quickly became virtual. Still, life as we knew it would never be the same. What life looked like before and after this monumental shift will forever be etched in our minds.
Candid about their experiences navigating this new normal, our experts provided a snapshot of what the market looked like before the pandemic hit, an overview of where it stands now, predictions about the future, and all the reasons why Chicago remains a great city for selling real estate.
Life as we knew it
Before COVID-19 struck, broker associate Millie Rosenbloom and her team at Baird & Warner were witnessing a strong start to the market on Chicago’s North Side. The volume of contracts written this January and February was greater than it was during those same months last year. “Once the pandemic hit and shelter-in-place took effect, we did see a drop in March of contracts written and activity slowed down,” she said. “But since the week of April 11, the market started to reemerge with contracts written trending upwards.”
Also in this issue
The situation was similar for Anne Rossley, a broker associate with Baird & Warner. She had more properties going under contract in February 2020 than she did in February 2019. “We were hot, hot, hot and anticipating hot, hot, hot. But COVID-19 put the brakes on everything,” she said.
The pandemic felt like a one-two punch to Barbara O’Connor, president of brokerage services at Dream Town, managing broker of its Lincoln Square office and team president of the Barbara O’Connor Group. First, she saw a lot of clients relocating to other parts of the country — mostly Arizona, Colorado, Florida and South Carolina — in 2018 and 2019 due to high city and state taxes. “Last year, if I had 10 sales, five of them were leaving the state,” she said. “They find it’s a better value in other parts of the country.”
Then 2020 came, and with it, a renewed sense of hope. “It was an amazing market,” O’Connor said. “It was like the floodgates opened and people came out. For a lot of brokers, the first three months of this year were like, who turned the switch on? And then the switch got turned off quickly.”
Luckily, the switch didn’t remain off for that long. “Four weeks into the pandemic, everyone thought it was a steep drop and a long way up,” O’Connor said. “But it has proven to be more of a checkmark, three to four weeks.” In week four, the market began to open up again. Sellers called her to ask about representing her listings, and buyers asked to go on showings.
Still, it’s not like the situation is back to normal. While the market is moving at the moment, O’Connor noted that still, sellers are not on board as much as is required to fill supply needs. This means buyers are anxious because there is not enough inventory to go around.
After the fallout
In general, Rossley’s outlook is bright. Her business is picking up with regard to calls, appointments, listings coming on the market and showings, she said. Even in the thick of the pandemic, it still seemed more like a holiday market to her, because business did not come to a dead halt. “Agents worked together to figure out how to make it happen,” she said. “In terms of number of units sold, I don’t think we’ll be down by any more than 10 percent.”
Both Rossley and Rosenbloom expect Chicago to come out of the pandemic strong. As the city opens up again, Rosenbloom anticipated a robust summer market. “I’m happy and proud to see that Illinois’ and Chicago’s positive cases of COVID-19 have been trending down,” Rosenbloom said. “It’s great to see we’ve succeeded in flattening the curve.”
Still, it’s important for real estate professionals to be prepared for all scenarios, O’Connor said. She’s worried that a lot of people on furlough will not get their jobs back, employers will be slow to hire, and companies may select candidates with less experience and lower salaries. “We might see short-sale situations due to people not being able to afford what they could in February,” she said. “I think the future is unknown. We’ll see some positive movement and some negative movement.”
What primes Chicago for a rebound
Through it all, Chicago remains an exceptional city for selling real estate based on affordability, ease of transportation, architecture, culture, development, and revitalization efforts. But for Rossley, one of the main reasons for optimism about the city’s future is its relative stability. “We are the first-class city of the Midwest,” Rossley said. “Historically, we haven’t seen huge increases and huge declines in real estate values. It has been much steadier than New York and California, which had huge declines in 2008 through 2011.”
While Rossley said steady home values make Chicago a great opportunity for investors worldwide, how local prices are perceived depends on where buyers are coming from. O’Connor noted that the cost of homeownership can sometimes come as a surprise to buyers relocating from out of state, in both good ways and bad.
“If they are from the East and West coasts, they are amazed at what you can get for your money,” she said. “If they’re coming from the Detroit suburbs, which has larger homes than we offer for a lot less money, it’s a culture shock.”
Rosenbloom, who was born and raised here, said what surprises clients relocating from all over the world most about Chicago is the beauty of its lakefront. But she’s also impressed with the overall feeling of this special city. “What I love about Chicago is the city itself,” she said. “We have a lakefront, business and industrial sectors, and culture. I also find the people to be friendly and helpful.”
Exciting development and changes in the city
It was the city’s diverse architecture that first captured Rosenbloom’s attention and drew her to a career in real estate. “As a kid, I loved looking at the different buildings throughout the city,” she said. Now she is excited to be representing Parkline Chicago, an architecturally significant glass and steel mixed-use tower at Randolph Street and Wabash Avenue.
The project is emblematic of a few trends happening in Chicago residential real estate development. First, the fact that it is mixed-use not only translates to better neighborhood walkability and assessments that will be lower than the competition but also fits in with the checklist for downtown buyers.
“The whole live, work, play is actually happening in the Loop,” said Tom Roszak, principal of Moceri+Roszak, the developer of Parkline, noting this new boutique high-rise focused on upscale lifestyle reflects that trend. “Everyone has been waiting for it.”
Another factor transforming the target market for the city center is that the number of private schools has increased tremendously in the past 10 to 15 years, Roszak explained: “You don’t have to go to the suburbs to raise your kids. You can actually be urbanites and live in the city.”
But it’s not just downtown that’s seeing changes. O’Connor gets excited to see midsized developments in neighborhoods, because it means residents might stay put longer and shows that the neighborhood is holding its own. She thinks Uptown in particular is ripe for revitalization since it has not increased in value the way Lakeview and Andersonville have. “So much can be done in Uptown,” she said. “Beautiful old homes can be refurbished. If they could bring in different venues — it’s right by the train and minutes to the lake — people could see their investment dollars won’t be lost.”
Rosenbloom feels the same way about the area. Rossley, on the other hand, would like to see development take place on the South and West sides. In particular, she said Little Italy, the area around the University of Illinois at Chicago, and Pilsen offer both affordability and proximity to transportation and downtown.
Rossley is also anxiously anticipating The 78, a mega-development by Related Midwest sandwiched between the South Loop and the Chicago River that will place residential, commercial, academic, and recreational outdoor spaces, as well as cultural events, in one neighborhood. “Chicago’s history is steeped in the river,” she said. “I’m just thrilled to watch everything developing around it, whether it’s housing or the riverwalk. It’s good for everybody.”
New agents welcome
While it might seem intimidating to jump into a massive market like Chicago, newcomers can use the friendliness of Midwesterners to their advantage. O’Connor suggested real estate professionals new to the area or the industry can learn the local market quickly by joining a team, especially if they are unfamiliar with the city.
“It fast-tracks you; You learn the ins and outs. You will basically be working on somebody else’s business, but you will be able to learn the city faster,” she said. To gain clients, she recommends sitting at as many open houses as possible.
While Rossley echoed O’Connor’s advice about joining a team, she also suggested partnering with someone who knows the market well and touring the neighborhoods to learn the housing stock. Do all those things, and not even a pandemic will hold you back.