Buyer confidence is steadily growing in the Chicago area and the luxury housing market is reaping the benefits. As sales continue to grow, prospective buyers should start focusing on the opportunities presented in the Midwest city.
We spoke with Joanne Nemerovski, Broker Associate with the Lincoln Park office of Compass, to discuss the current climate of Chicago real estate and why 2019 will be a good year for housing.
How has the increase in property taxes affected the luxury market?
I thought the increase in property taxes was going to affect us in a very negative way and I was nervous about it, but so far, the first few weeks of our spring market have been incredibly busy. When you look at the property tax issue and do the research on other communities you will see that the downtown market is coming into line with several of the luxury markets in the northern suburbs in Hinsdale, for example where property taxes are higher than normal.
What are your predictions on the effect property taxes will have for the rest of 2019?
I think the more faith people have in Chicago the tax increase will be less of a factor. When people are buying a luxury item and they understand that a small portion are going towards the police, the fire department, and the schools in the neighborhood. Most people are fine paying the taxes. They just need to feel they are actually getting those services. As confidence goes up in Chicago, the small increase in real estate taxes will be less of a factor. I am hoping with the new governor and a new mayor on the horiziation we will have a positive year.
For potential homebuyers who are hesitant to jump into the Chicago market what is your advice?
There are so many advantages when owning a home – financial and emotional. Homeownership encourages people to put down roots, and many times they are more enact to be a part of the community. When you are renting, you are on someone else’s schedule, when you can move, and what you can do with the place. This makes it less of your home. You are throwing away money and there are no tax advantages when renting. When you own, the money you would be spending in renting a place would be reinvested back to your own property, which is to your advantage.
What neighborhoods are buyers most interested in?
People are always interested in Lincoln Park, Gold Coast, Streeterville, and Lakeview but now even Bucktown, West Loop, South Loop and even Wicker Park, they’re all on fire.
What should interested buyers be aware of before closing?
They should work with an experienced broker who knows what to look out for as they are looking out in the best interest of the buyer and not for themself. They are less emotional and can and should have multiple checklists for location, condition, property value etc.
What factors have led to the luxury real estate market sales increasing while the rest of the market has hit a slump due to record low inventory?
In Chicago I’m not aware of any major slump. It seems like most properties are priced fairly are selling well. The lack of inventory actually adds to the supply and demand, which should push prices higher.
What should investors pay attention to with the Chicago market going forward?
Purchasing an investment property is similar to purchasing your own home. You should always do your homework, be aware of what you’re purchasing and do a thorough market analysis and know the condition so you aren’t blinded with any surprises.