The Jason Theory

S5 E2 - Why Chicagos pricing cant stop climbing - the DATA episode

• Jason Stratton

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We break down why Chicago’s market is running hot despite gloomy national headlines and how buyers and sellers can win when supply is scarce. From Loop stabilization to Avondale’s rise and Lincoln Park’s surge, we share data, tactics, and smart plays for the year ahead.

• contracts up sharply while inventory falls
• rates and the myth of automatic drops after Fed cuts
• two-flats as a path to value and lower tax base
• taxes rising and how buyers recalibrate budgets
• Loop price rebound and listing pullback
• Avondale momentum along the Blue Line
• West Town and Logan speed to contract
• Lincoln Park and Lakeview blue-chip strength
• post-possession, full underwriting, faster closings
• buyer prep, offer strategy, and lease flexibility
• rent pressure pushing renters into ownership
• suburbs heating with revived downtowns and luxe sales

You can follow us on YouTube if you just want to hear us. We’re on all the streaming platforms. Make sure you follow us on TikTok and IG. Instagram will give you our newest listings, at least previews. So you’ll see everything that’s coming on the market much quicker.


Setting The Market Narrative

SPEAKER_00

We've always, you know, you you read these, I I saw it was like, I don't know, it was this weekend that like the housing market is bad and be prepared for a terrible year and yada yada yada. But Chicago continues to outperform and outshine, especially in the major cities. And obviously when you're dealing with both coasts.

Contract Surge And Rate Reality

SPEAKER_01

Yeah. I mean, last year the two cities that had the most appreciation were Columbus, Ohio, and Chicago. What's the five P's? Do you remember it? Red Poor Performance. There you go. It doesn't matter how much money we get, if we don't close, it's no money, right? So no close is no money. I'm everything that I am because of my dad's death. And I wouldn't be as successful without his death. Welcome to the Jason Theory. This is season five, episode two, and we're gonna do a little bit more numbers. So if you're interested in really get diving into the numbers and where the market was last year and where we think it's headed, this is the episode for you. I'm just gonna start off with one thing. Last week there was 2,670 contracts signed. Last week? Last week. Wow.

SPEAKER_00

So this is a January that feels like a March-April then.

SPEAKER_01

It is the highest signing since they started really cutting rates, and we had a massive drop in a week in October. Wow. The amount of contracts to this date to today versus January of last year is up 60%.

SPEAKER_00

That's interesting given that there's not a lot of inventory.

SPEAKER_01

Crazy, yeah.

SPEAKER_00

That is where are these people finding products?

SPEAKER_01

60%. So two I mean 2,600 contracts last week.

SPEAKER_00

That's an insane number. Is that just Chicago?

SPEAKER_01

Just Chicago, not Chicago. All of Mred, just Chicago. Chicago.

SPEAKER_00

So Mred encompasses the suburbs north, south, no, not east, but and west. So this is just city, our 77 neighborhoods.

SPEAKER_01

Yes, this this hit my phone. Like I was actually at PT. A lot. And this hit my phone and I was my watch, and I looked at it when I was taking a break and I was like, what? But yeah, it's crazy. That a lot. So before we get into December's numbers, what are you most surprised about from last year? Is there anything that surprised you or it was, you know, you you thought that what happened?

SPEAKER_00

I did think that the rates were gonna go down last year. That surprised me. They went out a little bit, but I, you know, there was so much chatter at the end. Uh wait, we're in 26. So at the end of 24 that the rates would drop. Yeah. Um and they did a little. I mean, I'm talking about in 25, and I just thought that there was gonna be a much larger drop. So I think, and I think that was something that I predicted in our video that we did a year ago. So I was wrong. And they went down a little bit, but not like to the number that they were.

SPEAKER_01

So that was something that surprised Well, I think you were right in the fact that we did have three rate cuts in a row, starting at that, you know, in that October time. It's just like we as we've talked about, even when the Fed cuts rates, doesn't mean rates have to go down.

SPEAKER_00

Well, and that is a misunderstanding of most people that one does not necessitate the other.

Inventory Shock And Buyer Behavior

SPEAKER_01

If they follow our YouTube channel and our and our casts, they wouldn't know that. So these people know that. These people know, but the general public. So that so rates not hitting, because I think we both thought they would hit high fives. Yes. And and we have just now, I've just now started to see five, seven, fives, but rates went up yesterday. But I've just I saw a couple five, seven, fives, but it it was six and a quarter to six and a half pretty much all of last year. What else surprised you?

SPEAKER_00

The lack of inventory. The lack of inventory. I did think that people, I another thing I thought would happen is that more people would be turning around and giving up their 3% rate because they would have to move. And I think I've talked to some designer friends of mine who have been busier than we have because people are redesigning their homes. New house. Yeah, and that way they don't they don't lose their rate. That's happening a lot. So that that surprised me that inventory didn't loosen, but I did have a very intense conversation with a well-known developer over the holidays, and he said he can't keep up with the demand that he has so much business because of the lack of inventory.

SPEAKER_01

So I went to with buyers, I went to the corner of oh my god, I'm basically the corner, the north, the northwest corner of Horner Park. There's a new development right there on I'm sorry, not Horner Park in Lincoln Square. And there is a new development there, six units on Western, starting at 819.

SPEAKER_00

To live on Western.

SPEAKER_01

On Western at 819.

SPEAKER_00

Wow.

SPEAKER_01

And they put them on the market Wednesday, so January, whatever that is, 15th. And when we went on Saturday, they had one left.

SPEAKER_00

So that's surprising you. Yes. Is that your surprise? But that's 26. You're gonna say that's 26.

SPEAKER_01

What I'm just saying is like like you said, you you guys, so like anything, like anything that's out there is just getting crushed.

SPEAKER_00

It's getting gobbled up, yeah.

SPEAKER_01

Gobbled up.

SPEAKER_00

Yeah, I took out some buyers this weekend who we saw two great houses, and they said, Well, we want to wait and see what else is coming on. And I said, Well, both of these work for you, but that's fine. And I think that they're going to learn a lesson that they probably should have contracted because the longer they're waiting, the more people are gonna come into the market. But we're we're going sideways here. Though those were my two surprises that more inventory that people didn't let go of their three percents and that rates didn't dip, you know, significantly below six throughout the year.

SPEAKER_01

And what is your prediction for this year? Before we get into the numbers.

Predictions And Two-Flat Strategy

SPEAKER_00

Well, I'm not gonna try to do the rate thing again. I'm just gonna let the government and you know, them do that. I'm gonna my prediction will be that what we saw trending in 25 is going to be the same in 26, which is 20 buyers for every house.

SPEAKER_01

Yeah, I mean, the multiple offers one week into January were already starting, which is crazy.

SPEAKER_00

I also think what we were saying up earlier is that I think buyers are gonna start shifting their look to potentially looking into buying two flats, making those work for them, and turning those into either single families and keeping the the construction people busy, or they're saying, okay, I don't need maybe people aren't buying just for right now. They're buying for like these people. I don't want to move in five to seven years. So they're gonna live in it as a two-flat for a little bit and then down the road make that work into a single family. And I think I think that's gonna be a big, at least that's what I'm finding with my buyers in our early conversations, is that's where they're shifting their looks to be less competitive.

SPEAKER_01

Yeah, especially if that's a market that's gonna be a little less competitive because the barrier of entry is a little bit higher in terms of multi-units and the amount of money you have to put down and stuff like that.

SPEAKER_00

I mean, there are it's not as scary, it's not as much though when you're owner occupying.

SPEAKER_01

Yeah, no, it's it ends up being the same.

SPEAKER_00

It ends up being the same.

SPEAKER_01

People don't want to be landlords, so that kind of really helps. I mean, just there's at least there's a little bit of a barrier for you to get a product.

SPEAKER_00

I mean, you know, they're looking at like a two-unit, but the top floor being a duplex, right? So an owner's unit. And I'm like, you guys, your tenant is paying your taxes.

SPEAKER_01

Yeah.

SPEAKER_00

So, and the tax base is lower than a new construction or a single family house. So I do think that that's going to be a trend. So I think these two to three flat owners, give us a call. We can sell them for you.

SPEAKER_01

The taxes that came out end of fourth quarter that were, you know, 17% higher across the board. Did anyone, you know, have you had any calls and concerns about that from people, or are they just like, hey, it's the city, it is what it is.

SPEAKER_00

I think there was so much conversation around it that I think that people, at least the people I talked to, were prepared. I mean, my taxes went up$10,000, which was almost a third, which is just bananas. But I I wasn't prepared for that. But I do think that a lot of people were prepared for a massive tax increase just because there was so much conversation about it in the news and the shortage in you know our city of funds.

Taxes, Affordability, And Demand

SPEAKER_01

You know, we've got we've got some sheets here. We're gonna go over some stuff, and I'm gonna take a look, right? So I'm gonna go through we've got Avondale, West Town, which is basically Bucktown, Wicker, Wicker, Bucktown. We've got Logan, Lincoln Park, Lakeview, and the loop. I brought the loop because I find the loop interesting. Because I think the loop for the first time, look at that. Let's go over the loop first. So the loop has gotten destroyed. River North and the Loop are since COVID. Yeah, have gotten taken a hit. And we've said ad nauseum last year, if you're gonna buy something right now, the values in loop and river north. And so when I'm going over the numbers, I'm like, man, wonder what the loop did. So the loop last year dropped 21% of its inventory and 44% less new listings. Now the close sales are still drop. There's still lower close sales in 2.5 than 24. In 24, you've got 1581 units that traded, and in 25, 14.90 traded, right? So we're down 6%. But what I love is the price. This is the first year since COVID that year over year pricing went up in the loop.

SPEAKER_00

Let's also remember that in the loop we only have condos.

SPEAKER_01

Yeah, yeah.

SPEAKER_00

There's there's that's another thing just to think about is that there's only zero single family homes. Zero single family homes.

SPEAKER_01

So I thought this was I thought listen, the market time dropped 8%, prices went up 1.5, and you know, the number of homes sold less, but the number of listings was 44% down, which means that people are not panic selling or leaving. That's that's a good sign. And the change in inventory is down 21%.

SPEAKER_00

I think that's like that's a positive for the loop. For the loop. Right. When you see or hear some of these other numbers.

Neighborhood Deep Dive: The Loop

SPEAKER_01

Yeah, it was like I was like, okay, like listen, the the journey of a thousand steps stuff, well, a thousand miles starts with the first step. This this the oh five was the first step for the loop. Yeah I'm I'm really excited to see how.

SPEAKER_00

The market time was almost identical though. Well 88 to 89, which is interesting.

SPEAKER_01

Yeah. Well, that's December over December. Year is 85 to 78. Yeah, it's not that much. It's not that much, but it's a it's better than the opposite way. Yeah. And then what you wanted to talk about is a very hot neighborhood, and that's Avondale. I don't know if that's up there right now. So let's talk about Avondale. Avondale's been, I mean, it was like listed up and it's just continuing to grow.

SPEAKER_00

Continuing to grow. It's it's a market that I continue to get calls about, I continue to get questions about, and I think that Avondale, which we've been saying for very long time, at least four or five years, yeah, is a neighborhood that is we're going to see a lot happening. And if you're not familiar with where Avondale is, it is just north and follows Logan. So somebody said up to us just today, how about Logendale, right? So it's kind of like the it's kind of like what people did to Bucktown and Wicker Park when those neighborhoods were coming up. Now we're gonna call it Logendale.

SPEAKER_01

Yeah.

SPEAKER_00

But like so many of the restaurants are now on Diversy, which is really where Avondale starts, is at Diversy, even though people still think of that as Logan Square. And Avondale saw a huge, huge increase just from December 24 to December 25. The median sales price went from 394 to 501. That's just for the month of December. But the year over year went from 410 to basically 450 as the median. So the prices are up 10. 10%. That's a lot. It is a lot. So I think that that is a market to watch.

Avondale Momentum And Blue Line Effect

SPEAKER_01

Closed sales up 14%. Yeah. And inventory. So closed sales up, prices up, inventory down, which is means that that that people are going there. What I also thought was interesting, what you said, Soph, is if you look at this, Avondale's single family home is average price now, is 771, up 17.8% in one year, almost 20% increase. Right.

SPEAKER_00

The Chicago market hit this year was up 7% overall. So this outdid the market by quite a quite a large margin.

SPEAKER_01

What I do like about it is if you look at West Town, so if you look at Wicker Park and Bucktown, condo end is 600 grand, right? This is going into what you were saying upstairs. Logan up five to 550. So if you're a condo owner, you can make that move, like you said. You move from Buck, you sell your condo bucktown in Bucktown or Wicker Park or Logan, and you're you're basically legging into a home.

SPEAKER_00

Into a house, right? So that's what's appealing. And you're still in the same neighborhood and going, I mean, similarly, right? Going to the same restaurants. I mean, people in Wicker and Bucktown. Same bus stops and elsewhere. People in Wicker and Bucktown go out in Logan and Avondale. So it's again, we've been talking about the blue line, right? This is just following that blue line. But yeah, a great, great up-and-coming neighborhood. And the market stats have shown that to be absolutely accurate.

SPEAKER_01

I'm looking at West Town right now. I don't know if you have that in front of you. I sure do. And look at West Town. This is crazy. 44% drop in inventory.

SPEAKER_00

Let's explain though. West Town includes Ukrainian village, it includes most of Wicker Park. It includes East Village. So that's what West Town is. And I think it goes all the way almost to Grand to the south. So it encompasses a large, a large area. So some people don't understand what West Town is. And I think it's important that people understand where that neighborhood is.

West Town Speed And Price Pressure

SPEAKER_01

So it's almost like Lakeview, right? Where you have Roscoe in it, you have Southport Quarter, you have Wrigley. Yeah. You have all those different things. But West Town, man, did it perform closed sales up 9% on the single families, down 4% on the con, down seven, uh 4% on I'm sorry, on the um condos. But the overall inventory is down 44%. But the prices, I mean you're talking about a single family home now in Westtown, the average is 1.26. 2.8, isn't it? Is that 28? Oh, mild eyes. Right. And then the condos are now up to 600,000, up 3%. And the pricing in the single family homes is up almost 7%. And look at the market times. Down 20%.

SPEAKER_00

And essentially, so to understand also, generally speaking, when you're getting a loan, that's about 30 days. So this means these are going under contract in about 10 days. Yeah. Right. I mean, you get you, you know, if you've watched the market at all, you know the strategy. You you list on a Tuesday or Wednesday, you show over the weekend, and then you sign on Monday or Tuesday. So really you're talking like four days of market time.

SPEAKER_01

But so 52 days is getting your loan and closing. Yeah. So this is fast.

SPEAKER_00

This is very fast. I mean, the attached single family market time is 39 days. So 30 of that is your loan.

SPEAKER_01

Yeah.

SPEAKER_00

So, you know, and you have to imagine too that all of these homes are not vacant. So people are also having to move quickly, which is a big part of the game, is being flexible and fluid.

SPEAKER_01

And if there's multiple offers, like you said, you're sitting on those offers for a couple of days just trying to figure out which way to go.

SPEAKER_00

Well, and also something we're doing in the city that we never did before was post-possession. That is becoming a lot more, it was always done in the suburbs, but it's it's coming into play now in the city. And I think that that also could be playing into this quick market time.

SPEAKER_01

Discuss post-possession and why it's coming in because of this market timing.

SPEAKER_00

Well, because there, as you've heard us say ad nauseum right now, there's a lack of inventory. But a lot of sellers need the liquidity from their house in order to go on to the next house, or they need their funds from that. So what's happening is you're closing, and then the buyer is giving the seller a month or six weeks of possession so that they can then go find their house. So that was something that was always poo-pooed because of liability in the city. It was very, it was always done in the suburbs.

SPEAKER_01

Yeah.

SPEAKER_00

And so now that's happening in the city. And I think that that also is feeding into these shorter single-family house market times because people can close and don't have to get out right away.

Post-Possession And Fast Closings

SPEAKER_01

Yeah. You know, you can close a single family home now in seven to seven to ten days. Yes. So that's what's kind of leading into that too. Yeah. No pressure on the lenders there. I I talked on the previous podcast. I actually talked about post-possession. And I was like, now you you almost have to present your offer with, hey, and we're willing to allow it. If you, you know, like just throw it out there.

SPEAKER_00

Or sellers are saying we need post possession. And offers that are giving us that will be given a much bigger consideration. Like, we'll take, I had a broker say, my clients will take less money if you give them the house till June. Yeah. They want to make it. People are also giving free rent, free rent backs. Yeah. I mean, there's you have to do what you have to do as a buyer to get into a house. And so the post-possession is a big thing. And I think we're seeing that in these numbers.

SPEAKER_01

Look at now here's so here, this is the boomer, right? Logan Square. Look at that. Logan Square. I mean, you're not that far away from Bucktown, are you? Logan Square, average house 1.145, up nine percent. And Bucktown in those areas, West Towns 1.23.

SPEAKER_00

Well, just are almost trading at par. That's but Logan Square includes Bucktown north of Armitage.

SPEAKER_01

Oh, north of Armitage, yeah, yeah.

SPEAKER_00

So a lot of this is Bucktown, like Bucktown property, right where our office is. So this, and that's something else people don't understand. Logan Square does include Bucktown. So the devising line is actually the 606, but that's a whole other conversation. So yeah, but yeah, but Logan Square is catching up very closely to West Town.

Logan And Lincoln Park Breakouts

SPEAKER_01

So I mean the amount of sales down nineteen percent, right? So like this is what the headlines say. Oh, we're down 19%, it's a bad market. And you're like, no, no, no. The sales are down nineteen percent, but the inventory is down fifty seven. So if the inventory is down fifty seven and the sales are down nineteen percent, it's a it's a good market. It's a Really good market. And that's why you have prices up nine percent in single family homes and prices up six percent, five point eight on condos and townhomes. I mean, it's just Logan is just extremely hot.

SPEAKER_00

I mean, the the the market time went down almost 40% on con on D on single family houses. I know.

SPEAKER_01

So I mean, that's just I the list the the list to contract was eight days.

SPEAKER_00

Yeah, it's crazy.

SPEAKER_01

Eight days. So like the rest of that is getting it close, but when I did the end of the year stuff in like Logan and West Town, it was eight days. Yeah, it's a lot. And and like you said, three or four of that's my figuring out the multiple offers. And then the old standby, Lincoln Park. Or your blue chip here. Yes.

SPEAKER_00

I mean, just that also just went crazy numbers, dude. I I'm actually surprised on the condo number. I don't know if you're surprised by the condo number. The average condo is six was six hundred and seventy-five thousand. I would have thought that would have been a lot higher.

SPEAKER_01

Well, yeah, but the minute you go, because Lincoln Park, like the minute you get to West Lincoln Park, like the minute you get like into that west of Ashland place, you have like the prices and you have all those vintage places too. I know, but Jason West Town was 600. It's newer shit. I agree with you. That seems a little like surprised me. But that's also up 12%.

SPEAKER_00

I I know. I'm just saying, I just this surprise this number in general surprises me. I would have thought it was higher. I mean, and then of course the single family house is the median is 2.2, which is up almost 20%.

SPEAKER_01

20% in a year. On 197 homes. So 20%. 23. Listen to that. Look at that. 23% higher in sales. So in 04, this is how strong the market is. Just listen to this. In 04, they sold 190. In 24. 24, sorry, thank you. In in 2024, they sold 160 homes in Lincoln Park. In 25, they sold 197. So 23% more sales, and the prices go up 20%, and the inventory drops 52.8%.

SPEAKER_00

But this is one of the only markets where the closed sales went up.

SPEAKER_01

Yeah.

SPEAKER_00

One of the only markets in the city, I think. So what we're looking at here. Yeah. Oh no, Avondale went up.

SPEAKER_01

It's crazy.

SPEAKER_00

Yeah, Avondale and Lincoln Park are the ones and Lakeview.

SPEAKER_01

Lakeview.

SPEAKER_00

Mm-hmm. But Lincoln Park went up the most.

SPEAKER_01

Yeah. I mean, how incredible of a market it is that change in closed sales goes up 25%, inventory drops 53%, and pricing goes up 20%. I mean, as a seller, it just does not get better. As a buyer, it sucks.

Lakeview Shift And Condo Strength

SPEAKER_00

The list to closed is at 99.4% on detached and 101% on Condel. So there, there's your story. When your broker tells you you got to go over asking, here's the data.

SPEAKER_01

Yeah, and ask, like I always said that asking is just a suggested price.

SPEAKER_00

Suggested retail price.

SPEAKER_01

This is the suggested price. They should put that as a field. Yeah. The suggested price. All right. Lakeview, once again, like you said, up change in sales, up 19%, but the pricing up 16.7. So Lakeview now is 1.85.

SPEAKER_00

It's a huge neighborhood, though. So Lakeview encompasses Wrigley, Southport Corridor, Southport Corridor, East Lakeview. East Lakeview. So they're like just I'm thinking like in single families, right? Like you have some really nice neighborhoods with some really great inventory with oversized lots.

SPEAKER_01

I mean, Southport Corridor, the average house has got to be 2-8. Yeah. 2-8, 2-9.

SPEAKER_00

You know, this number doesn't surprise me as much. I think because a lot of buyers got priced out of Lincoln Park, I think that people are more open to Lakeview. I mean, we don't have North Center here, but I would be surprised if those numbers aren't jumping up as much. So, you know, I think that people Lincoln Park or East Side buyers are, you know, heading north. And I would, you know, so these Lakeview numbers don't surprise me.

SPEAKER_01

Great neighborhoods up there.

SPEAKER_00

There are great neighborhoods up there. The condo market was uh 490,000. That's up 15%.

SPEAKER_01

So And once again, look at the days. 32.

SPEAKER_00

32, yeah. I mean, and that is that is actually shocking for a a condo.

SPEAKER_01

32 days on a condo.

SPEAKER_00

It's shocking that the condo.

SPEAKER_01

And look at the year to date, look at the price. 100.7%. Yeah.

Buyer Prep: Compete And Win

SPEAKER_00

So Lakeview, Lincoln Park, they've all done super well. The whole market in Chicago has done well. We've always, you know, you you read these. I I saw it was like, I don't know, it was this weekend that like the housing market is bad and be prepared for a terrible year and yada, yada, yada. But Chicago continues to outperform and outshine, especially in the major cities. And obviously when you're dealing with both coasts.

SPEAKER_01

Yeah. I mean, last year the two cities that had the most appreciation were Columbus, Ohio, and Chicago.

SPEAKER_00

What's going on in Columbus?

SPEAKER_01

I don't know what's going on in Columbus.

SPEAKER_00

I was there for a wedding. I don't know. It's a nice city. They got a great town. Yeah. This it was a good market. And I I think we're going to continue to have a good market in these neighborhoods, especially the ones that we're working in. I mean, I think that's a good thing.

SPEAKER_01

What are you telling your what are you how are you preparing like for buyers that are listening to this? How are you preparing them? What are you saying to them to get them ready for 52% less inventory and 100% close in 30 30 days?

SPEAKER_00

Well, I've had four of those just in this week alone.

SPEAKER_01

Let's talk about Saturday's consultation. You're sitting up here, I came in and you're talking to are they new buyers first?

SPEAKER_00

For new buyers, first-time buyers, they're shifting from renting for the last three years to they've realized prices there isn't going to be a crash. They were waiting for this crash.

SPEAKER_01

Everybody.

SPEAKER_00

Everybody was waiting for this crash that has not happened. So they just said it's time to get off, it's time to, you know, become an owner. And I no longer, if if the person lives in the city, I am having them come in and meet at our office and having a very casual but very frank sit-down conversation with here is what you can expect to happen. You are going, if you're not cash, you need to get approved and not just like pre-approved. I want you through full underwriting so we can go in and we can make an offer that is not contingent on a mortgage. And this is literally said this.

SPEAKER_01

Remember last week? That's the first that's one of the first things I said. We're not fully underwriting, get it, you got a chance.

Offers, Mindset, And Lease Tactics

SPEAKER_00

Yeah, and explaining how it's not as scary. It used to be like taboo for people to waive the mortgage contingency. But if you educate and you're prepared, it's just a tool. So that's the first thing I talk about. The second thing I talk about is this shortage of inventory. And, you know, we're gonna go to an open house and you're gonna see 20 people there. And likely all 20 are gonna be writing. So what can we do to differentiate ourselves? It's writing, you know, there there's multiple ways to go about that. And I think coming here and sitting down with both of us, we can prepare you to be successful. We have the team. We have a big part of it is the reputation. Brokers we work with know that we're not gonna write an offer, get a winning bid, and then pull back. Which happened, which has not not to us, not with our buyers, but it happened at someone on our team this week that had multiple offers and then the buyer got scared.

SPEAKER_01

But having the conversation and also let me was why you should always write. Even if you think that you're not gonna get the place, you don't know like ceilings or where people know like when people pull out where you're gonna be. Be like it's you shouldn't say I love the place, but there's so many people. Just write the offer. Yeah, and say, hey, and just tell the broker, hey, thank you so much. I didn't get it. Just call us and we're here.

SPEAKER_00

Yes. And that that's what's happening now with that property. But preparing them to say, listen, if you get the winning bid, be happy. Don't second guess yourself. Yeah, it's a good one. Be fortunate that they chose your offer. And, you know, it it's the full package. It's not just the price. It's always price, right? I mean, it's hard to compete with cash, but it's price. It's knowing people, the brokers knowing that we have clients that are gonna close, knowing that I have a full suite of people who are gonna make this very smooth for you. You just have to listen and be prepared.

SPEAKER_01

And what do they say when you're like, hey, this is what it's at? It's gonna be multiple offers. It's this, it's that.

SPEAKER_00

You know, they're educated now and there's so much information. I mean, I had one client buyer come in with something. She said, admittedly, this came off of Chat GPT. Literally, her list of questions for me came off of Chat GPT and they were good questions.

SPEAKER_01

People do that, people do that now in inspections. They're like, here's what I got from ChatGPT for inspections.

SPEAKER_00

But I think the great part about that is that the buyer is getting educated before they're meeting with me. So when they're hearing it from me, it's just a reassurance that what they're expecting is exactly what's going to happen.

SPEAKER_01

When you go through the process, let's say last year and there's a ton of multiple offers and you lose out two or three or four things, what are what are the some of the things that you kind of really tell your client and tell them how to refocus or just to be patient? But like, is there anything is like, is there like a, for lack of a better word, is there a mantra you're saying to them so that they continue to stay focused and stay energized on the process?

SPEAKER_00

Keep your eye on the price. Like you're just, I mean, but I think that's a part of the preparation from the beginning is like you might write three or four offers before yours gets accepted. So if your first one gets accepted, don't think you overpaid. Just think that you got you, you know, you were fortunate to be chosen. But I always tell people, listen, if it everything happens for a reason, and I believe that, and not just in real estate in life. And so, you know, eventually when that when they do become the winning bid, they usually will say, Okay, this is why everything else didn't work out.

SPEAKER_01

Yeah.

Seller Readiness And Rent Vs Buy

SPEAKER_00

I had, I don't know how many buyers I had last year. There was a lot, a lot, a lot of buyers. I think they were like about 45. I only had one couple who said, you know what, we're gonna take a break. Tapped out, tapped out, but they're they're back on Zen list and ready to go. And they tapped out really because they needed to make a decision with their lease. Yeah. Okay. And so they just didn't feel confident that they were gonna find where they needed to be. So we huddled and I said, listen, sign a six-month lease. Don't sign a year lease and sign a lease that allows you to get out with like a two-month penalty. And so they're like fully prepared and ready to hit the road this spring now. So, you know, part of that was was the lease and the pressure of the lease.

SPEAKER_01

For sellers, you know, when someone comes up to you and says, I don't know if I want to sell because of my rate and this and that, and where am I gonna go? What what are the kind of things you're telling sellers other than like on how to prepare to sell your place? But like, is it like when I have when I have a consultation with a seller, the first thing they say is like, you know, we need more space, but we just don't know where we're gonna go. And we and and none of it's like a like, you know, we've talked about it, like the post-possession. It's almost like a it's like a simple. Yeah, and it's like a it's basically like a pinch point in the process where like there's such a lack of inventory that all these sellers are so afraid to list because they don't know where they're gonna go.

SPEAKER_00

This has been going on for several years now.

SPEAKER_01

Yeah.

SPEAKER_00

I always think it's a good idea for our sellers to go look, go to open houses, go see what the possibilities are because then they get excited, right? And they see that, yeah, there there are things out there. And, you know, like I said, we structure the deal with a post-possession so that they have time to find where they want to go.

SPEAKER_01

But do you find yourself losing, not losing, but do you have sellers that are selling and then just say, hey, let's, you know what? I'm gonna sell in this in this madness and then just rent and wait to see what happens, or is everyone I have not had that, but that makes it.

SPEAKER_00

I I get that sentiment. That hasn't happened to me. And most of my clients are, you know, ready to buy. They're they're they're finding it, they're making it work.

SPEAKER_01

On the rental end, I read something last week that there are nine renters for each space that's gonna come available in March. That's crazy.

SPEAKER_00

I don't know. I took a buyer out yesterday who's sick of renting, and she realized that she spoke with the lender, and her purchase of a one bedroom with assessments and taxes, she pays$3,600 for a one-bedroom in the Westloop, which is bananas.

SPEAKER_01

It's insane.

SPEAKER_00

She's like, I'm spending$50,000 a year on rent. I'm like, yeah, that is crazy. Her purchase with 10% down on a one-bedroom, taxes and assessments and mortgage is$31 something. That doesn't take into consideration the write-offs. Yeah. And she's an accountant, so she's very smart. She knows what she's talking about, and she's like, Yeah. So, you know, I do think that the rising rents are pushing some people to maybe spend a little more than they're comfortable with, but the rents are so high that it makes sense.

SPEAKER_01

Yeah, they're expecting another 10% increase in rents this year.

SPEAKER_00

Well, then there will be more buyers.

Suburbs On Fire And COVID Reset

SPEAKER_01

We just need more sales.

SPEAKER_00

Just need more sellers. So if you're looking to sell, give us a buzz.

SPEAKER_01

Yeah. I think the one thing that like it's interesting. Whenever I talk to people, the first thing, because real estate's everyone like has either lives in a home or you know, or it's a topic of conversation. So the first thing everyone says, How's the market? I'm like, you know, I'm always like, it's crazy. It's not sustainable. The pricings are out of control. And they'll always be like, oh, that's great for you. I'm like, no, it's not. Yeah, we are working twice as hard. Like we, we have there, like there has to be, you know, it's not, you just don't sell homes to sellers. Like, you know what I mean? Like, there's buyers, there's buyers that we have to get those people. Get those people in there and and and you have these all these buyers, and people can't afford the homes or they just can't compete with everything that's going on. And then a lot of times they'll say to me, Well, we'll just move the burbs.

SPEAKER_00

I'm like, dude, it's not gonna get it's not any, it's actually just as bad in the suburbs.

SPEAKER_01

Unless you're gonna go to like 10 bucks. Two hours out. I mean, yeah, no. Go to Crystal Lake. I mean, I don't know, maybe the Crystal Lake market's good, but you gotta go far.

SPEAKER_00

I mean, the Naproville market is crazy. Crazy, very hot. Oak Brook, Hinsdale, everything west. Everything north, the near suburbs are all Glenview, yeah, Glen Allen.

SPEAKER_01

All those places are just as just as well.

SPEAKER_00

Well, met Winnetka. I mean, everybody knows what's been happening in Winnetka. It's like making national news. So what's happening in Winneka? Well, I mean, you know, there's like 30, several$30 million sales up on the lake. I mean, these are numbers that had never been seen before, ever.

SPEAKER_01

That's crazy.

SPEAKER_00

Ever. So, you know, that that's what's going on in Winneka and Will Met, there's a resurgence. You know, there's um the Plaza del Lago. It it's just before COVID, you couldn't give a house away in Lake Forest. And now you can't buy a house in Lake Forest.

SPEAKER_01

I mean, but do you think that's entirely from COVID, or is that people just saying, hey, listen, I don't want to spend three million dollars in Lincoln Park and high-five my neighbor when I can go up north and get it.

SPEAKER_00

But that's always been the case. No, but I've never not been the case with the difference between the suburbs. I think, I think since COVID, I do think I personally feel it's a result of COVID. I think since COVID, people opened their eyes and saw it. And then the retail restaurants started opening and stores started opening. And it wasn't, it was, it was sort of a thing in like with my friends. I mean, I'm in my mid-50s to say that, oh, I could afford to raise my children in the city, right? That was a big status thing. I can afford to stay in the city, and I think now it has shifted where there are things to do in the suburbs. And now it's shifted like, oh, I'm going to the suburbs.

SPEAKER_01

Yeah, the downtowns and the suburbs are fantastic.

SPEAKER_00

Yeah. Well, they, you know, they've opened all of these big restaurant groups in the city, have opened up in the suburbs. I mean, Lake Forest's downtown is phenomenal. Winnetka's downtown is phenomenal. I mean, I go from the city to drive up there to go shopping.

Don’t Wait: Equity And Scarcity

SPEAKER_01

I I know Glenview has started giving out, and I I know this from a restaurant owner. Glenview gives two million dollars if you open up a restaurant to literally pay for your restaurant to be built.

SPEAKER_00

To be your build-out. Yeah. I don't I don't know if that's the same.

SPEAKER_01

The cities are given all that money because they want to, they love the Glen, but they want the re they want the train station area, like the other downtown.

SPEAKER_00

The neighborhood feeling portion, yeah.

SPEAKER_01

And they're smart because every time they open a restaurant, more people come, and then the prices go up. And then But I do think that was a result of COVID.

SPEAKER_00

I mean people. Well the people came and they're like, we need this. I mean, all of Sophia Steak was in the suburbs, and then they opened in the city at one Chicago. Oh wow. So, you know, I do think that that was a big I do think it's a result of COVID, but I think, yeah, I think that the all of these markets just continue to increase in value. So don't wait. You're not gonna, you're not gonna, you gain nothing by waiting. Can always refinance if the rates go down, but you can't get those prices from three years ago.

SPEAKER_01

No. And then we were just talking. I mean, like obviously that was 15 years ago, but I sold a house for$690,000 in North Center, and it's gonna list at 1125, and I'm sure it's gonna go to one two. Yeah, that's just crazy to me.

SPEAKER_00

I mean, the amount But that's 15 years of of of value.

SPEAKER_01

But where else are you gonna double your money? And it's leveraged.

SPEAKER_00

Yeah, well.

SPEAKER_01

That's just crazy to me. I mean, look at my house.

SPEAKER_00

Yeah, my house is tripled, yeah. It is but that but I've also been there 28 years, 20, uh no, not 28, 26 years. So okay, well, all right. Well, that's we'll check in and this is the numbers of uh 20 episodes.

Final Forecast And Where To Follow

SPEAKER_01

This is the numbers episode to see how we did. And my I well, I'll finish with my predictions. I think we're gonna see another, man, I we'll see another eight to ten percent increase. You may even get more because inventory is just non-existent and a total change in the marketplace. I mean, by March, everything's gonna be gone.

SPEAKER_00

We'll see.

SPEAKER_01

Yeah. Unless we do get lower rates, but then it's gonna bring so many more people into the market. Okay, thank you so much for watching episode two. You can follow us on YouTube if you just want to hear us. We're on all the streaming platforms. Make sure you follow us on TikTok and IG. Instagram will give you our newest listings, at least previews. So you'll see everything that's coming on the market much quicker. And from right now, that's a place that people need to be looking if you try to find inventory. And thank you so much. We'll see you next month.