Real estate market predictions for 2023

by Timothy Inklebarger

Featuring the perspectives of:

Howard Ackerman,
Vice President and Mortgage Production Manager, Regions Bank

Jennifer Ames,
CEO and License Partner, Engel & Völkers Chicago

Tim Brigham, Branch Manager, Union Home Mortgage

Liz Brooks,
Executive Vice President of Sales and Marketing, Belgravia Group

Fran Broude,
Regional Vice President-Midwest North, Compass

Jeremy Collett,
Executive Director of Capital Markets, Guaranteed Rate

Ryan Doehrmann,
Chief Mortgage Officer, GreenState Credit Union

Matt Horney,
Executive Director, Senior Lending Manager for Illinois and Wisconsin, JPMorgan Chase & Co.

John Matthews,
Senior Vice President of Residential Sales, Baird & Warner

Jim Miller,
COO, Executive Vice President, Designated Managing Broker – City Offices, Jameson Sotheby’s International Realty

Mark Pasquesi,
President, Berkshire Hathaway HomeServices Chicago

Esther Phillips,
Senior Vice President, Director of Sales, Key Mortgage Services

Ayoub Rabah,
President, Coldwell Banker Realty, Central West Region

Steve Rettig,
Regional/State Managing Broker, eXp Realty Illinois

Tim Tuz,
Senior Vice President – Capital Markets, Wintrust

Ted Weldon,
Executive General Manager of Development, Lendlease Chicago

David Wolf,
President, Wolf Development Strategies

Thad Wong,
Co-Founder and Co-CEO, @properties

What do you expect for the overall housing market in 2023?

Howard Ackerman, Regions Bank: I think 2023 will be a year where more first-time homebuyers enter the market. First-time homebuyers don’t need to sell a current property and, as we continue to emerge as a nation from the COVID-19 pandemic, more people will be forming households and ready to establish a home that they own. With existing homeowners and the current rate environment, I also expect to see more renovation loans as homeowners decide to improve their current homes instead of purchasing. In addition, I believe lending in low- and moderate-income areas will be strong as homebuyers are able to leverage attractive loan offers, which help counter the impacts of higher interest rates. Further, I believe homebuyer assistance programs will help support volume in the next year, even if overall volume is down.

Jennifer Ames, Engel & Völkers Chicago: The residential market has slowed down and will likely continue to slow down in early 2023, but the good news is that this is not a repeat of 2008-09 because mortgage underwriting standards remain restrictive, homeowners have equity in their homes and inventory is still relatively low.

Mortgage rates will continue to go up as the Fed attempts to counter the highest inflation we’ve experienced in decades, but they are expected to start to come back down toward the end of 2023. Smart buyers will take advantage of weakening prices as interest rates peak, knowing that they can refinance when rates drop.

It is also worth noting that with the run up in prices in 2020-21, housing affordability was at its lowest point in the last decade. The jump in pricing was unsustainable as it significantly exceeded income growth. We should welcome the return of a sustainable market.

Tim Brigham, Union Home Mortgage: I think that we will be strong and healthy in 2023. We have a lot of shifting, but with the 10-year swings we have seen historically, it will be a great time to own real estate.

Liz Brooks, Belgravia: While higher interest rates and a fear of economic uncertainty will continue to produce significant market headwinds, there are still meaningful demand drivers and supply constraints that will lead to deal activity. Millennials have surpassed baby boomers as the nation’s largest living adult generation, and they are entering their prime spending years, getting married and starting families. As rental rates have climbed steadily for years, many Millennials are now preparing to purchase homes. And as even more existing homeowners stay put, unwilling to give up their ultra-low mortgage rates, there are fewer homes for sale; supply is likely to remain constrained for the foreseeable future.

It’s also important to remember that all markets are local, and while higher interest rates are certainly impacting the Chicago market, we have not experienced the recent dramatic pricing swings of other markets.

Fran Broude, Compass: I think that 2023 will continue to be a more normalized market than the two years we experienced through the pandemic, which was more of an anomaly with record-breaking home sale prices. Mortgage rates are definitely up dramatically in just the last several months and more than doubled in the last 10 months. And while home prices may be softening some, this decline in home sale prices is off of record highs. Inventory is still relatively low in some markets, but not all, because real estate is hyperlocal and a significant number of homeowners have locked into very low interest rates (2.5-4%).

The buying frenzy that often resulted in bidding wars, buyers’ foregoing contingencies, etc., has subsided, as have the number of transactions year over year. That same sense of urgency will not be driving the buying decision in the same ways as the last couple of years.

Buyers have the ability to take the time to be more thoughtful in making their offers, and this will provide a good opportunity for buyers.

Jeremy Collett, Guaranteed Rate: We can forecast, but nothing is certain. The Mortgage Bankers Association (MBA) believes that housing prices will likely level off, but the higher-rate environment will mean that fewer homes will sell or refinance in 2023. By buying low in a cooled market, once prices heat up again, the steady build in home equity offers many advantages: dropping PMI (if applicable), taking out a HELOC to invest in home improvements or refinancing with more favorable terms. No matter what, I think we will see a return to seasonality, with a focus on home sales in spring and summer when people are more inclined to move.

Ryan Doehrmann, GreenState Credit Union: I think we all know it’s going to be tougher in 2023. We are all anxiously waiting for inflation to be tamed and the Fed to start reversing their language, which might not happen any time soon. It’s obvious, but high rates and low inventories are not going to help the market; we need to get rates back into the 5-6% range (preferably lower) for movement to start happening again. It’s positive to see home prices come down a little, but we need more listings and rates to come back down in order to see a healthy housing market.

Matt Horney, JPMorgan Chase & Co.: While the market may seem daunting right now, it may still be the right time for buyers who are well prepared financially to take on homeownership. Recent data indicates that we may be headed toward a buyer’s market as inventory increases and prices show signs of decline.

John Matthews, Baird & Warner: I see the continued normalization of the market. Demand will stay high, but the continued lack of inventory along with higher mortgage rates will moderate sales to levels we haven’t seen for several years. I do expect to see a slight depreciation in housing prices overall, move-in-ready will buck that trend.

Jim Miller, Jameson Sotheby’s International Realty: Coastal areas are likely to see drops in total transactions and volume near 20%. Chicagoland has always been a more stable market. We are expecting transaction and volume to be down roughly 10%, due to the lack of inventory and a buyer pool hesitant to jump into a high-rate environment.

Mark Pasquesi, Berkshire Hathaway HomeServices Chicago: Fundamentally, the real estate market appears sound and in no way resembles the market downturn of 2008. I’d expect 2023 to be a real estate market more in line with the five years leading up to COVID.

Ayoub Rabah, Coldwell Banker, Central West Region: Without seeing any major surprises, we expect the housing market to continue into this normalization as opposed to the last few years. Macroeconomic factors will continue to create headwinds; however, we do not expect home prices to reduce drastically, as we still have low inventory in many areas and buyer interest is still strong. Supply and demand will always be the biggest economic factor at play.

Steve Rettig, eXp Realty Illinois: While 2023 will be down in relation to 2020 and 2021, it will head back to some normalization compared to pre-2020. Agents have to watch the economy, recession effects, interest rates, etc., to see where the market will trend. But as always, there will be agents who thrive in this market as in any market, up or down, good or bad. Those agents are the ones who stick to their consistent marketing and follow up.

Tim Tuz, Wintrust: Overall, the housing market will continue to face affordability challenges fueled by higher interest rates and lack of housing inventory keeping prices up. The refinance market will likely be non-existent, with over 90% of mortgage loans having interest rates below 4%; however, the purchase market will remain relatively strong due to the changes made by FHFA to help first-time homebuyers, as well as an influx of foreclosures and short sales that could hit the market next year, bringing some affordable options to the market for buyers.

Ted Weldon, Lendlease Chicago: Limited resale inventory and rising interest rates will continue to pose challenges for the market in 2023, but motivated buyers will buy, and many are gravitating to new-construction developments that offer the modern floor plans, finishes and amenities these purchasers seek. It’s also a more predictable timeline from contract to closing, which helps with buyer confidence.

Thad Wong, @properties Christie’s International Real Estate: In 2023, I see a slowdown in sales with longer market times and a pullback in pricing. In this market, it will be imperative to price homes appropriately to sell them, as opposed to what has been happening over the past couple of years. As buyers become more comfortable with higher mortgage rates, the second half of the year will be more fluid.

Do you think any segments of the residential market will be better in 2023? (new construction, rural, luxury, etc.)

Collett: It’s hard to predict, and it may vary by market. Remote workplaces have allowed many homebuyers to explore non-urban communities, including smaller towns and even more remote areas. Rising housing demand in Montana and Wyoming is proof of that. Both new and luxury construction will likely remain strong in areas with recession-proof industries. As supply increases and demand wanes, we could see many cities enter buyer’s markets.
The affordable housing market will see some growth with the recent pricing changes instituted by Fannie Mae and Freddie Mac. With home equity so high after the home price increases of the last two-plus years, HELOCs and home equity loans should be popular. Looking at the top end, jumbo and non-qualifying loans, particularly those for real estate investors like debt service coverage ratio (DSCR) programs, will likely continue to grow.

Tuz: Typically, high-end real estate is less impacted by high interest rates or inflation pressures, so that sector will remain strong. In addition, the influx of foreclosures/short sales due to the expiration of foreclosure moratoriums in most states may bring a lot of affordable housing inventory to the market and, coupled with new programs made available by Fannie Mae and Freddie Mac to assist first-time homebuyers, will result in a spike in affordable lending programs.

Ames: Time is money! Between the cost to renovate, which escalated with inflation and supply chain delays, buyers are reluctant to purchase homes that require significant updating. Consequently, demand for new or move-in-ready homes will stay strong, with lower prices and longer market times for dated homes.

Pasquesi: New-construction spec homes will be very appealing and in high demand for buyers. Getting builders to build them may be the challenge. Today’s buyers don’t want to wait 12-18 months for something to be built to suit. Builders who are building spec homes now will do well.

Miller: The high end of the market, in our opinion, will perform the best where those buyers are less rate-conscious as a whole. Product that is positioned well, move-in-ready and priced appropriately will sell.

Matthews: Moderately priced new construction will continue to be strong where it can be delivered. I am already seeing bargain-hunting in the high-luxury markets, which should continue into 2023.

Rabah: Luxury will continue to stay strong as clients are not as negatively impacted by interest rates as, say, a first-time homebuyer might be. Coldwell Banker’s 2022 Trends Report found that on a national level, 80% of U.S.-based high-net-worth consumers agree that real estate is a safe investment. That sentiment can positively impact the luxury segment.

Pasquesi: New-construction spec homes will be very appealing and in high demand for buyers. Getting builders to build them may be the challenge. Today’s buyers don’t want to wait 12-18 months for something to be built to suit. Builders who are building spec homes now will do well.

Weldon: With the recent completion of Cirrus, our for-sale development in the Lakeshore East neighborhood, and the 2023 delivery of The Reed, a hybrid condominium and apartment tower at Southbank in the South Loop, we will be very active in 2023. Between these two buildings, we are bringing 466 new-construction condominiums to downtown Chicago at a time when buyers are looking for move-in-ready homes that offer a range of floor plans, quality construction and upgraded finishes. Few buyers are interested in a home that requires the time, cost and stress of a renovation, especially with ongoing supply chain issues.

Because Cirrus, with the adjacent rental tower Cascade, and The Reed incorporate both condominiums and apartments, the amenities are far more extensive than what is typically possible in a for-sale development. This is a key selling point for those transitioning from luxury rental properties. Buyers who are interested in a building and unit features that support a sustainable lifestyle, which is a steadily growing group, appreciate the Energy Star-certified appliances, biophilic design influences and overall energy efficiency at both buildings, as well as the naturalized green roofs and proximity to green space, which is incorporated through the adjacent publicly accessible parks that are at the center of both developments.

What growth, if any, do you expect for your company next year? Do you expect your business to thrive, decline or remain stable? Why?

Ames: Engel & Völkers is perfectly positioned for the shifting market because we only hire full-time, professional agents (whom we call advisors at Engel & Völkers) who have what it takes to succeed in any market. Our advisors are the best of the best, and our marketing is more robust than in most other brokerages, empowering our advisors to better serve our clients.

Another strength of our company is the fact that we have offices where our clients are moving — all over the United States, Canada and the world. As people leave Illinois for states that are more tax friendly and/or offer a different lifestyle or climate, our advisors can help them by referring them to similarly qualified Engel & Völkers advisors in destination markets. By adding referral income to their business plan, their income has the potential to stay strong or grow, despite a local market downturn.

Esther Phillips, Key Mortgage Services: I anticipate we will be the benefactor of growth in 2023 for several reasons. First, our owner believes in using these market corrections as an avenue to invest in people and technology that allows our employees to be the best version of themselves. There have been 34 recessions, panics and depressions since our company was founded in 1855, so navigating through this current market correction is nothing new. Second, Key Mortgage was created for the agent/client relationship, and because that has always been our primary focus, the technology, marketing, but most importantly, the culture that is required to support and attract an exceptional sales and operations team is already in place and will be seen as an enormous asset going into 2023.

Ackerman: We are very well positioned to grow market share in Chicago. We focus and specialize in purchase business by working closely with real estate agents to deliver an outstanding customer experience to homebuyers. Our mortgage team is comprised of experienced, relationship-minded associates who are committed to doing things the right way and making life better for our customers and creating shared value with them. We benefit from the strength and stability of being a large bank with portfolio lending power, while also being a direct seller and servicer for agency and government loans. Especially in these times, the fact that we service what we sell (and do that very well according to the experts in our industry) is a big differentiator that gives our customers peace of mind.

Brooks: Belgravia is always looking for development opportunities in Chicago. In the first quarter of 2023, we will finish closing the balance of homes in our sold-out West Loop CA6 development. We have move-in-ready homes in both our Triangle Square and Renelle developments that we expect to sell and close in the spring. We will also expand beyond Chicago for the first time with our entry into the Scottsdale market and our new development, Portico. Since opening in July, 60% of our 112 units have been reserved, and we’re preparing to break ground in the spring. We’ve been excited to see a strong contingent of Chicagoans purchasing second homes in Arizona, not to mention the presence of Chicago standbys such as Portillo’s and Lou Malnati’s!

Pasquesi: We are in a growth mode and expect our business to thrive. What differentiates our business is that we are a home services business offering mortgage, title and insurance in addition to brokerage. HomeServices is our middle name. That positions us well for this market in a way that most companies are not, and we find ways to operate very efficiently. At a time when you are seeing real estate companies’ stock values plummet, we are experiencing the opposite. Not all real estate companies will survive this downturn, but Berkshire Hathaway is built to last, and we expect to move confidently forward into the 2023 market and the one after that.

Broude: I expect Compass to continue to grow in 2023. Our city and suburban agents are top-producing agents who continue to be successful even in a shifting market. Compass wants to continue to expand and grow throughout Chicagoland, as there is still plenty of room for growth.

Compass agents have an advantage with the industry’s only complete end-to-end platform. This creates time and cost efficiencies for our agents, allowing them to focus their time and resources on what matters most — their clients.

Doehrmann: I think we’re all expecting a continued decline in 2023 depending on what happens with inflation, interest rates and housing inventory. Fortunately for GreenState Mortgage, we acquired Blueleaf Lending in late 2022, and as we continue to blend our two companies together, we’re creating a better overall mortgage division. I expect us to remain stable if not improve our overall business with our full suite of secondary and in-house portfolio products, along with a retail banking division that helps with deposit accounts, debt consolidation and bridge loans.

Rabah: Our company is poised to grow in regard to our most important goal — agent satisfaction. We continue to improve service offerings and technology that allows our agents to win more listings and achieve higher sales prices. We also have and attract very productive agents, so despite some of the challenges beyond our control, our agents will continue to support their vast network of clients.

Matthews: Interestingly enough, we expect to see moderate growth in all three of our businesses (sales, mortgage, title). We enlarged our Chicagoland footprint the second half of 2022, and we have opportunities already for 2023.

Wolf: Our business is very specialized in that we market and sell/lease new developments. We have two projects delivering in the second half of 2023, and two of our other projects have started delivering in 2022, with more inventory to sell. So, we are projecting overall growth in 2023.

Miller: We feel our company will continue to perform well versus the market because of the seasoned brokers on our roster. During times of transition, there is normally a flight to quality. Our brokers have developed strong relationships over the years with their clients, and those relationships will prove invaluable during 2023.

Rettig: Our company is on track to grow both in Illinois and nationally in 2023, as interest remains high in our “work from home” model, on-demand support and technology, and the ability to work in all 50 states under one umbrella. Experienced agents are very attracted to our model, as it is very supportive of team growth both locally and nationally. Agents in general want the best agent support, new and better technology, and have more demands on their business than ever before. Keeping pace with that is fueling our growth in the coming years.

Tuz: Wintrust is extremely well positioned for a challenging market due to being part of a very well capitalized bank. It opens many opportunities for growth, as we will likely see many other companies scale back, merge or get acquired, or close their doors, as we have already seen several close their doors in the latter part of 2022. Wintrust will be there to provide stability that comes with being part of a bank and having access to resources and portfolio programs that are not available on the secondary market.

Wong: I expect that we will grow our market share, but sales volume will be down from the past couple of years. In slower markets, it’s much more important to focus on share, not volume. Volume is often directly correlated with the general market, but we can control market share with best practices.

Collett: The housing market, much like the economy, is cyclical. It never heads in one direction for too long before adjusting. When things slow, opportunities arise to prepare for the next comeback. That way, when the tide does turn — and it will — we are fully prepared to ride the next wave instead of reacting to it in the moment. That’s why we continue to invest in technology to provide the best customer experience possible. We have a strong business plan in place for 2023, which is focused on fully supporting our loan officers. We offer a unique environment to set them up for success, including:

• The CEO Mindset™: When markets cool, winners with the right mindset emerge. The GR philosophy allows LOs to be the CEO of their business. They have a team they can delegate marketing and administrative tasks to so they can focus on growth.
• FastTrack: While banks can take weeks and months to close, our FastTrack program can get customers a CTC (clear to close) as fast as 24 hours and to the closing table as fast as 10 days.
• PowerBid Approval: This helps customers compete with all-cash offers. This fully underwritten credit approval shows sellers that the buyer is a qualified loan candidate and can close at the same speed as an all-cash offer.
• Pricing flexibility to win: Guaranteed Rate’s LOs control their pricing and offer the best array of products to customers, such as Lock ‘N’ Roll, which lets buyers lock in today’s mortgage rate for 90 days while they house shop with no commitment to buy.
• Dynamic Marketing. We have the best-practice model to constantly stay in front of your potential customer network.

What will be the biggest challenges for agents in 2023?

Matthews: Agents who rode the market the last two years and didn’t follow a business system will suffer. Those with strong systems and supportive offices will continue to do well.

Unfortunately, a small percentage of agents truly follow a good business system, even though many are available. We have been working with our managers to proactively coach them during this normalization period. We rolled out our Balance program in 2021 and expanded it in 2022. The program has made our agents’ lives easier and given them more time to focus on their business.

Ames: To stay positive and not fall prey to negativism! If we believe all the doom and gloom reporting about the real estate market, we will not have a healthy mindset, our sales will drop, and our lack of success will become a self-fulfilling prophecy. Markets go up and down, but our clients always need a place to live. The residential market is driven by changes in family size, promotions, transfers, retirement, etc. Our clients will still move, and they will need our seasoned expertise more than ever.

Miller: Maintaining a growth mindset will be difficult for some brokers. Transitioning markets occur every eight to 10 years. It’s been 14 since our last shift, so there are a lot of brokers who have not experienced this type of rapid change in a market. Staying focused and productive will be key. It will have to depend on redefining “work.” Brokers will have an opportunity to perfect their systems, processes, habits and routines, which will benefit them when the market stabilizes.

Pasquesi: Any time you come off a hot market where many agents have had career years, you run the risk of having agents lose motivation if the market softens. We use extensive training programs, like our popular regional workshops, to offer guidance on current market conditions that offer a plan to help agents sustain and grow their business.

Rabah: The reality that the market is seeing a decline in units is due to the economic headwinds and the pervasive national headlines with negative sentiment on the real estate market and economy. Agents who benefited from the market coming to them in the past won’t have easy times. But those who put in the work of prospecting and getting their name out there can still grow.

Rettig: The biggest challenges for agents in 2023 and in prior years and future years will always be mindset and motivation. Real estate is pretty simple, but it’s not easy. Follow the simple steps to success in our business; it just takes commitment, consistency and hustle.

What can agents do to succeed in 2023?

Rettig: Agents need to change their behavior today/now/ASAP if they haven’t already. As our market normalizes back to how it was three to four years ago, the agents who are getting deep in their databases right now are the ones who will have a good 2023. This is no time to rest on your laurels. Are your systems in place? Is your marketing set? Email newsletters, social media platforms, mailers, items of value, in-person client events, phone calls, check-ins, etc. These next 30 days are critical in setting yourself up for 2023.

Broude: The market will likely be different in 2023 versus the last couple of years. Agents who recognize this will lean into the strategies that have made them so successful in the past. That includes doubling down on opportunities for coaching and increased marketing. At Compass, we have a fabulous coaching marketplace, where we have partnerships with several national top business coaches, and our ongoing quarterly agent success programs available for all agents.

With the new volatile mortgage rate environment, it will be important to have a strong partnership team working on your behalf. At Compass, we have a wonderful partnership with our mortgage company, OriginPoint, and their seasoned professionals, who have experience to navigate all the finance options to strengthen buyer purchasing power.

Wong: Most of the work that goes into determining next year’s volume will happen over the next four months, so start working on your 2023 plans now. Start with organization, and end with implementation. Now is the time to really take advantage of the tools that can differentiate you from other agents and other brokerage firms. It’s important to integrate technology into your customer service model. Technology that is focused on building and enhancing relationships is going to give you an advantage in 2023 and pay off big in 2024.

Ames: Work hard! Our CEO, Anthony Hitt, recently shared a saying from Missouri where he grew up, “Even a chicken can fly in a tornado.” The last couple of years were an anomaly, and brokers with little or no training were able to look competent and sell homes.

In a balanced or down market, the true professionals will rise to the top. At Engel & Völkers, we are lifelong learners who believe that reading, sharing, collaborating, masterminding and evolving will empower us to be successful. Also, if you have a growth mindset, invest in yourself and your marketing, are ethical and hold yourself to a high standard, and do what is right for your clients every day, you will succeed regardless of market conditions.

Matthews: Follow a system, such as Ninja Selling. Understand that the consumer generally only knows what they hear on the news, which is theatrical, irrational pessimism. The agents who build, maintain and communicate correctly to their database will be much better off and outperform the market.

Pasquesi: Agents must have a business plan. Our general sales manager, Joe Stacy, is a certified coach for the 12-Week-Year method of business planning that is both nimble and highly focused. And our managing brokers are seasoned coaches who can help agents adjust to this moderating market. We also have on-demand training, workshops, town halls, book groups and many ways for agents to enhance and improve their skill sets and take advantage of opportunities.

Rabah: Helping to calm their clients and network with context. What is happening on a national level may or may not be the reality of the situation in your market — or the market your buyers are hoping to move to. Agents need to continue to be extremely agile with pulling hyperlocal market data and helping clients make informed decisions based on facts — not national sentiment. I also always coach our agents to work closely with the right lender and stay as central to the transaction as possible. The more the agent stays involved in the entire process, the more they can help move things along and get to the closing table.

Is the work-from-home trend still changing the way people are shopping for homes?

Broude: With the hybrid workplace model still being fairly prevalent, it is impacting the amenities buyers are looking for in their home. Not necessarily the way they shop, but what they are looking for. There is still keen interest in finding homes with home offices, bonus rooms and outdoor living/entertaining spaces, etc.

Rettig: Absolutely. The work environment in general will never be the same in America. Coupled with low unemployment and more available jobs, people today can easily up and move. If their employer doesn’t like it, they can just get a new job elsewhere, often in an area with a lower cost of living and a better quality of life. It will be interesting to see in about 10-15 years how COVID-19 has affected American society as a whole, not just in their housing desires.

Ames: Work from home is not changing how people shop for homes — they were already looking online as the first step in the homebuying process long before the pandemic. But the work-from-home trend is changing what people are looking for in the homes they buy. Having a quiet place at home where they can get their work done or jump on a Zoom call is increasingly important, and the open-concept living is slightly less desirable.

Matthews: Although many people are going back to the traditional workplace environment, there are still more remote workers and flexibility in work schedules. This will continue to affect the buying habits in the market, likely for years to come.

Miller: Yes. In fact, those buyers who held out purchasing during the pandemic and find themselves working remotely on a permanent basis will be a large part of the buyer pool needing to buy in 2023.

Rabah: Work-from-home is like that proverbial genie in the bottle — it’s hard to put it back in. Even if people are going back into the office, the tech tools and comfortability with flexibility that many employers now offer are here to stay. We still see the home office and outdoor space as top requests from buyers.

Pasquesi: For sure. People aren’t tethered to a specific location for work, as they were previously, so that’s opened up a whole new way of thinking in terms of what they want their lives to look like and from where. Home office space, or transitional space that could be used as office space, continues to rank high among buyer needs. Previously, that may have been more of a want than a need.

What does the landscape of your company look like post-COVID? (Are agents coming back to the office? Do you have more tech? etc.)

Miller: It depends on the location of the office, the speed of the market and the individual agents. We have agents who like an office environment and want to spend the majority of their day at a desk, and others who just like to come in to our offices in between listing appointments and showings. We like to create a fluid environment where each agent can enjoy our offices around Chicagoland depending on their schedule and what they are looking to accomplish for that day. We also encourage agents to travel between our different offices worldwide to network with their peers and experience different markets to help better serve their clients. Our goal is to reinvent the real estate office concept in 2023. The way our agents work has evolved in the last few years, and so should their workspace and resources.

Pasquesi: Many agents returned to the office as soon as they safely could. While our agents, staff and home services professionals have the tools to do their jobs effectively and well remotely, many found that they missed the networking and camaraderie of the office environment. Real estate is a relationship and people business, and our greatest asset is our strong company culture. We’re having in-person meetings and events where people can share ideas and market information and learn from each other. They value being together as much as they possibly can, and it’s a whole lot of fun.

Ames: Post-COVID, we are growing at an unprecedented (but careful) rate. Agents are tired of working for companies where all their support is online, with little or no access to talk to someone. Because we are a boutique company, our staff is in our offices and available to meet with our advisors in person. Of course, they can also schedule an online meeting if that is more convenient, but the bottom line is that our exceptional support team offers hands-on, first-class support for our advisors and their businesses.

Rabah: This year has been fantastic in terms of getting agents back in the office and hosting events where we can network and learn from one another. We expect next year for our agents to need a lot of support and are proud to have the resources to serve them either in person or virtually.

Rettig: The agent migration happened in 2020-2021, hence the massive growth of our brand in the past two years with our virtual “eXp World” platform. As offices closed due to COVID, many agents realized, “Hey, I can do a lot of this on my own, what do I need an office for?” So they looked for opportunities in brokerages with less overhead, less brick and mortar, better commissions, better technology and the same or better level of customer service that they can now get from the comforts of their own home. The real estate industry is changing; more young people are joining the industry than ever before, and they have different wants and needs.

Matthews: We do see more agents yearning and coming back to the office environment. We have developed an incredible tech stack, our training department has created virtual and in-office options, and importantly, we’ve upgraded our marketing services portal to deliver timely marketing materials to our agents.

Will agents be more important to your business in 2023?

Brooks:Chicago has the most experienced and professional brokers in the industry, and Belgravia Group values our longstanding relationship with them. We have been through many real estate cycles together and benefit from the collaborative nature of the Chicago brokerage community — we are all in this together.

Weldon: We view agents as critical partners in our business, always, and it’s our goal to deliver on their expectations and their clients’ expectations. At Cirrus, we created a 3,000-square-foot sales gallery steps from the development site that showcased our attention to detail with a full-sized furnished model and additional full-scale kitchen, even including the very windows being installed in the tower to offer the most realistic experience possible. Upon the building’s completion, we finished six model units. We are taking a similarly robust approach at The Reed, where the sales gallery is located next door on the top floor of The Cooper, our first building in the Southbank master plan community.

At both developments, we are working closely with agents and their buyers on financing opportunities that help mitigate some of the impact of recent rate hikes, understanding that while rates are still relatively historically low, the increases and volatility have impacted buyers.

At Cirrus, we are currently running a broker incentive campaign along with high-touch tours and bespoke gifts for buyers who come back for a second showing.

Wolf: Agents are crucial to the success of every development, and they will be even more essential in 2023. We value our relationships with agents, and we all win when we collaborate.

What impact do you think crime is having on real estate in Chicagoland?

Rabah: Chicago is a big city, and with that comes big-city challenges, but we’re proud to have agents in every neighborhood and for every negative story, there is a positive one not being told. It’s extremely important that agents, elected leaders and homeowners work together to invest in the community. Additionally, I’d add, high-rises with doormen, surveillance and investments in security are seen as a key amenity.

Ames: Unfortunately, the daily reporting about crime in the city is causing some Chicagoans to move away and prompting others who might have downsized into the city to instead leave the state or remain in their suburban homes. But it is impossible to quantify that shift, as there are economic and demographic factors in play, as well.
For most of us, life goes on as usual. Chicago is a world-class city with incredible culture, architecture, restaurants, civic engagement, leading medical and educational institutions, beautiful parks and lakefront recreation, an ample supply of fresh water, and so much more. As real estate agents, we are ambassadors of our great city. Focusing on the positives, together we can make a difference.

Matthews: Crime, whether up or down, is always a concern, and people just need to be smart about it.

Miller: It is now part of the discussion for households, where three to five years ago it was not near as much. On the other hand, we have buyers moving to Chicago to escape the challenges that other large cities are experiencing.

Which Chicagoland neighborhoods or suburbs are on the rise and have the brightest housing outlook in 2023?

Pasquesi: While no one has a “crystal ball” that actually works, the health of a real estate market can best be observed by comparing the number of accepted contracts within a 30-day window to previous years, and also calculating the current months of available homes for purchase, to determine if a market is balanced or leans too much in favor of either the buyer or seller (either of which can be problematic). Comparisons to 2020, 2021 and early 2022 can be skewed due to the artificial nature of the market caused by the pandemic, while comparisons to 2019 tend to be more meaningful.

Chicago neighborhoods like the Loop, Lincoln Park, Lakeview, Andersonville, Edgewater, Bucktown, North Center, Old Irving Park and Hyde Park have been outperforming 2019 figures, and the level of inventory in each of these neighborhoods is much more balanced (three to four months), giving buyers plenty of options.
Outside of the city, Winnetka has seen an increase in month-over-month pending contracts and is stable comparatively to 2019, though their current months of supply is low, at 1.6 months available. Hinsdale has seen a decline in pending contracts both month over month and compared to 2019, while their supply has risen to 3.8 months of homes available. Lake Forest has seen an increase in month-over-month pending contracts, a slight decline in pending contracts compared to 2019, and their supply of homes available to purchase is healthy, at just a little over three months.

The Oak Park, River Forest and Forest Park areas look like they will maintain solid markets into 2023. As more companies bring back employees to the office in the coming months, the Oak Park, River Forest and Forest Park communities are very desirable for commuters, with three accessible train lines, I-290 and arterial streets. The inventory in all three communities is still quite low, keeping prices strong and tilting the market in favor of the seller. River Forest has been seeing inventory numbers about 25% of pre-pandemic inventory, Oak Park is coming in at 30% of pre-pandemic numbers and Forest Park is near 60%. The tight inventory will create a sense of urgency with the spring market as more buyers come out. Even as we have seen a slowdown in the last few months, homes that are appropriately priced are still selling quickly.

Ames: There is no “one size fits all” answer to where buyers want to live. It depends on where they are in life. They will go where they feel a strong sense of community and have access to the resources that they need, which may include a vibrant restaurant scene, convenient shopping and other amenities, high-quality schools, access to doctors and other professional services, and/or nearby transportation. The good news is that between the city and suburbs, everyone has options where they can happily call home.

Miller: We are bullish on the Chicagoland market because it’s relatively inexpensive compared to other world-class cities. The beautiful part about Chicago is that each neighborhood and suburb offers something different for each household.

Matthews: Outdoor space is still a want of many of our buyers. The communities with neighborhoods that have larger lots will thrive. Communities with strong downtown areas will also maintain their values better. There is a general sense that people want to socialize again.

Read More Related to This Post

Join the conversation

New Subscribe

  • This field is for validation purposes and should be left unchanged.