Between HGTV home makeover viewer candy and the filters of interior design perfection on Instagram, real estate has never been sexier. We are constantly being seduced into loving the home we have with upgrades and the latest bling (remember when no-one knew what shiplap was?) or finding that proverbial “diamond in the rough” that will go from frumpy to fabulous with the swing of a sledgehammer.
And yet, is anyone really clear on the unfiltered state of our local real estate market? You know, the part where the money matters and an entirely new (and sometimes foreign) generation of buyers is suddenly calling the shots? We’ve all heard whispers of doom and gloom Chicago-wide but the reality is, the local real estate market isn’t crashing. It’s just changing.
With the fall selling season quickly upon us, we called upon some of the Barrington area’s most successful real estate professionals to help us get a big picture view on the state of the market, and how a little insider know-how can help lead to more successful buying and selling decisions.
So, let’s start with the good news.
The Barrington area is still an amazing (and increasingly hipster) place to live. Spanning 90 square miles and four counties—Lake, Cook, McHenry, and the southwestern part of Kane—the Barringtons, Deer Park, Kildeer, Inverness, and Lake Zurich check all the boxes. We’ve got excellent school districts; a diverse cross-section of residents in age, gender, and ethnicity; all the shopping, dining, and culture anyone could want; not to mention acres and acres of forest preserves and open spaces for living our best Country life. In our communities, family is always first, parks and public facilities are abundant, and local nonprofits provide a multitude of ways to make our towns—and our world—a better place.
Sounds like paradise, right? We tend to think so. And yet, as a new generation of discriminating millennial buyers enters the market (packing just as much buying power as their Baby Boomer ancestors), local real estate gurus say it’s important to embrace what some are calling the “new normal.”
“Millennials make up 66 percent of first time buyers and represent 34 percent of the local market,” says Mark Munro, a broker with Baird & Warner Real Estate. “They respond to photography and most will do their own fairly thorough online research for a potential property.”
What that means is that your home not only has to be up to par and in tip top shape, but it also needs to be ready for its virtual close-up. That means better staging, that means better photography, that means rethinking the way your beloved property will come across to an Instagram-obsessed, HGTV-bred buyer that can just as easily “swipe left” on to your competitor.
“Millennials want what they see on Pinterest and HGTV, such as white quartz countertops,” says Melanie Parsons, a real estate professional at Keller Williams Success Realty. “If the seller has the budget to make upgrades, it will help attract this demographic.”
Like many generations before them, millennials are doing things their own way—and very differently from their parents’ generation—including how they buy their homes.
According to our expert panel, most millennial buyers prefer turnkey homes that are fresh, new, and move-in ready. They work long hours and are less likely to want large yards and properties that require maintenance or renovation. The priority is on living and enjoying their best family life in a hassle-free home. And seriously, can we blame them?
However, where the demographic targeting gets tricky goes beyond luring millennials.
“The first thing you need to do is figure out who your demographic is for your home,” says Heidi Seagren, founder of Seagren Fine Homes with Jamesons Sotheby’s International Realty. “Not every home is for millennials so who are you trying to attract? Figure that out and target how you present it. Then, how you stage, price, and present the home is catered to the potential buyer you’re trying to reach.”
Seagren has a good point. While millennials are dominating the market in the way their Boomer predecessors did a few decades ago, there are some properties that might not appeal to them without significant renovation or upgrades.
“There are two different styles of buyers in our market place, the first type of buyer is one who has sufficient funds for a strong down payment but may not have additional reserves or simply chooses not to use those reserves to personalize a home. This is the type of buyer that we seek out a finished turnkey product that meets their needs and requires very little if any modifications. The 2nd style buyer is one that chooses to purchase on the lower end of their budget and uses additional reserves to refine a home to their liking, ”says Rob Morrison, founder of the Rob Morrison Team with Coldwell Banker.
Are you willing to make that investment? If so, make sure the makeover is millennial-ready.
“Millennials are extremely numbers-driven and less emotional, viewing their home not as a retirement plan, but a place to raise their families,” says Judy Gibbons a broker with Jameson Sotheby’s International Realty. “They do a lot of research and believe they need a professional realtor to get them to the finish line. But first-time home buyers can actually get into the market and rates are fabulous.”
Just remember there are other options if you don’t want to make that investment, and other parts of the buyer demographic that can targeted just as strategically. While the millennial families are sweeping the Barringtons, the Boomers are downsizing and, sometimes, looking for that “fun little project” they’ve never tackled before. If your property is one of those Fixer Upper gems, leave it as is and market it just like that—possibly even with a blueprint or two about what our friends Chip and Joanna Gaines might do.
BRING IN THE BUYERS
Let’s be honest. The days of property bidding wars are fewer and far between.
Depending on your price point, you could be in for some serious competition—especially from fellow homeowners who bought when you bought, and for the same reasons. Think about it. If you’re downsizing because all the kids have finally flown the nest, so are all your neighbors who joined you at the playground.
That means you need to price your property well and market it in ways that didn’t exist when you purchased it more than a decade ago.
“We are in a buyer’s market, so sellers need to set themselves apart with condition and price,” says John Morrison, founder of the Morrison Home Team of @properties.
Before a home is being listed online, your real estate professional might sit down with you to assess what else is on the market in your neighborhood, and offer an honest evaluation of how your property compares.
“It’s important to educate sellers and better inform them,” says Kim Alden, broker and founder of The Kim Alden Team with Baird & Warner. “Knowledge is power.”
Rob Morrison says pricing your home correctly when preparing to sell is critical.
“The market analysis needs to be concise,” he explains. “Sellers should make sure their broker understands the market and uses the correct comparable homes, which should be within a two-mile radius of the subject property in most cases but not all, with the same schools and similar amenities.”
This is especially important as the market softens. Munro says demand for unit sales in the Barrington 60010 market is down 6 percent year-to-date versus 2018, and 20 percent versus the same time in 2017. However, that’s not all bad news.
“The market is cyclical, and right now is a great buying opportunity,” says Seagren. “Sellers need to set themselves apart with price and the condition of the home.”
Maria Devins, a broker with Baird & Warner, says that buyers are looking for an overall “wow” factor and that pricing is often the biggest challenge. “Every seller wants to feel their home is worth so much more because it is where they created priceless memories,” she explains. “However, buyers are very savvy and even the littlest things can make a buyer lower their offer.”
It’s important to remember that a market is just that—a wide open arena of buying options. Want to make yours irresistible? Spruce and refresh as much as budget allows, and as others have stressed, make sure the price is right.
“Market time is not your friend in the real estate world. You can actually sell for less money if you don’t price it well,” says Parsons. “It’s eventually going to sell for what the market will bear,”
STAGED TO SELL
Say what you will about the millennials, their influence has changed all our lives in ways we never imagined. From Uber to grocery shopping on Amazon, consumers of all ages are following their lead—and that includes the real estate market.
Whether it’s the popularity of HGTV home makeover shows or an obsession with interior design Pinterest boards, there is a fantasy element to how homes are being staged for the market. Savvy buyers need to go beyond the bones of their home to highlight a lifestyle that jives with their target demographic.
“Buyers are still glued to HGTV and they expect perfect, not cluttered or filled with too much furniture, grandma’s settee, and personal photos,” says Gibbons “Paint is the least expensive improvement you can make before putting your house on the market. Fresh new bedding and towels go a long way, and remove rugs to show floors. Spotless and clean always seals the deal!”
According to the Real Estate Staging Association, homes that are staged before going to market sell 73 percent faster than non-staged counterparts.
“Staging is very important and I provide free staging consultation to every one of my listings,” says Alden. “It makes a huge difference. Taking out the current seller’s personality allows buyers to come in and see themselves living in the house. This could include removing personal mementos, painting over a bold color to give it a neutral “greige” color, and removing old wallpaper.”
For better or worse, today’s buyers are more lured in more by the “look” of a home than the mechanical improvements more practical generations of the past once cherished. That new roof or air conditioning unit is still a selling point, but an equal focus needs to be placed on making the home as move-in ready as possible.
“For the large majority of homes in this area, many of them have a little bit of age on them and are in dire need of renovations,” says Christine Jurs, Vice President and Director of Communications with Advance Design Studio Ltd. “We offer a one-stop-shop where we help consumers encapsulate the whole process from design to construction so they know what their total project investment looks like in advance and there are no surprises.”
Munro says home condition and “presentation” have never been more crucial.
“The importance of proper preparation cannot be overstated,” he explains. “I spend a great deal of time working with listing clients on smart preparation because it pays off with quicker market times and higher sell prices.”
Along with the P’s of presentation and preparation comes another, more lofty goal—it also must be in pristine condition.
“That is not even negotiable for home sellers,” says Connie Antoniou, Vice President of Sales with Jameson Sotheby’s International Realty. “It’s a must. You need to be the prettiest girl at the dance.”
She works with her home sellers to evaluate what investments will bring them the best bang for their buck.
“The highest return-on-investment is replacing a garage door, with a 90 percent ROI, followed by entry door replacement with a 70.7 percent ROI,” Antoniou says. “Minor kitchen remodels under $30,000 bring a 72.6 percent ROI.”
The idea of needing to invest money in a home just to sell it may sound daunting, but John Morrison says that decision should be made on an individual basis. There are often situations where a whole-home makeover just doesn’t make sense for the market.
“Overall curb appeal is important, and sellers can do other minor, less expensive, things to improve a home’s appearance,” he explains. “Taking down wall-to-wall mirrors in the bathrooms and replacing with stylish decorative framed mirrors, as well as professionally painting the vanities and putting on new hardware, goes a long way.”
Whatever decisions you make for home staging, it’s important to get that done before you move to perhaps the most critical part of this new real estate game—the glamour shots.
THE VIRTUAL CLOSE-UP
Let’s face it. We know Country magazine might get people excited about a home from our pages but most home buyers in today’s modern age will not even step foot into a property without viewing it online. In fact, the process for cultivating a home’s online “profile” with photography and 3-D tours is almost as extensive as creating an online dating profile.
The home suddenly has a personality, a story, and a style with a cunning purpose to swoon and to sell.
“Your first, second, and even third showings are on the web,” says Antoniou. “Sellers need to work with a broker who can supply them with their online statistics, from client feedback to online views.”
Not only do online pictures make the first impression to most potential buyers, but high-quality professional photography will present your home in the best possible light. Drone footage, virtual staging (sometimes done all on a computer with potential furnishing scenarios), and a targeted social media campaign are also tools that can pique interest in your property.
“We go a step above in our photography because the photos online will be your first showing,” says Seagren. “If they don’t like what they see, they are not even going to come to an in-person showing.”
That’s a pretty harsh reality. But it’s also one of the reasons you need the right real estate professional by your side.
“You need a seasoned professional, someone who has sold in good and bad markets to all demographics; you need an expert,” says Seagren.
Devins says she likes to give this part of the selling process the personal touch, one that can demystify the parts that may feel overwhelming to less savvy clients.
“I’m the messenger of the market—helping my clients understand and navigate the market’s expectations of price and movement and the entire process and transaction of selling their home,” she says. “What the Internet can never replace is the immeasurable expertise of an experienced broker who knows the area, the market stats, who has the ability to dig deeper for details on the property not available to the public—and whose negotiating skills are incalculable.”
Given all the sage real estate advice we were given as part of the research for this article, Devins may have a point.
Filter or no filter, nothing replaces old-fashioned experience. And who knows? Maybe there is still a thing or two this new generation can learn from those who have been in the real estate trenches through every trend and have continued to succeed—closing by closing—every step of the way.
Rob Morrison Team | Coldwell Banker