Page 6 - CooperatorNews Chicagoland Fall 2021

6 COOPERATORNEWS CHICAGOLAND
—FALL 2021
CHICAGO.COOPERATORNEWS.COM
Spreen, “because we’ve got great interest rates,
our prices are down right now, and there’s a
real positive energy.” She describes Chicago as
feeling “electric,” with people getting back out
in the warm weather, dining at restaurants,
sitting outside, and going to the reopened
Navy Pier.
According to Spreen, the Chicago co-op
and condo sales market did see some dips in
pricing, but activity remains apace. Much of
this can be attributed to the ease with which
buyers, sellers, and agents have taken up—
and mastered, in many cases—the technol-
ogy available to them, including virtual open the pandemic, cities in the South, with more Freddie Mac chief economist Sam Khater sees door space [are] almost as important as loca-
houses and property tours. “We still had a re-
ally decent selling season,” Spreen says, “even experienced an influx—and in some cases, a sumer inflation recently has accelerated at its
if our prices were down a bit, we still had peo-
ple buying. And some had never even gotten
in to see the condo before they actually closed ciation reports that aside from a slight price
on it.”
Garrett Derderian, Director of Market In-
telligence for property firm SERHANT., re-
ports that the bounce-back is apparent in New Northeast and West Coast has fueled strong vaccinated as of the time of this writing, ac-
York City, too, where during Q3 2020, sales demand for homes there, says the Associa-
averaged 10.65% below listing prices. The av-
erage discount for condos was 11.78%, for co-
ops 9.55%, and for townhomes 18.94%. Since 20% for Broward and Miami-Dade counties.
then, discounts have gotten significantly more
shallow. “Currently, we see discounts hover-
ing around 8%,” says Derderian, “indicating 2021, the total num-
the market is beginning to tighten as asking ber of condo sales
prices realign and more buyers return to the in Broward grew by
city now that COVID-related restrictions are 126.9%; in Miami-
lifting.”
In Boston, condominium sales are not is an astonishing
only bouncing back—they’re breaking re-
cords. According to the Greater Boston As-
sociation of Realtors, this April, which saw a 19.9% and 23.0%, respectively.
60.3% increase in condo sales over last April,
had a record-setting 1,220 units go into con-
tract. Douglas Elliman Downtown Boston’s as a comparison month—lockdowns were in ly.) And in Miami-Dade? Five hundred forty-
recent market report notes that Q1 2021 had full effect in April of 2020—but there is still a one percent.
the highest number of condominium sales in “severe shortage” of homes for sale compared
a first quarter since 2006.
“The statistics are mind-boggling,” says areas like New York City), which the organiza-
Gene Hashkes, a realtor/broker at William tion says is the main contributor to these price Americans see South Florida real estate as a
Raveis in Newton, Massachusetts, “and I’ve surges. They also note that in parts of South safe place to park their money at a time when the pandemic that brought the world to its
been doing this for 25 years. With more peo-
ple vaccinated, with us returning to work and and townhome deals were all cash.
back to life, you’re seeing a resurgence in the
condo market.”
Additionally, thanks to historically low in-
terest rates many first-time homebuyers may some unforeseen obstacles. “First-time buyers a sales associate for The Jills Zeder Group, a motely and will never actually go back to their
find that they’re now able to afford a city con-
do, while the numbers might not have worked first home for a multitude of reasons, includ-
a year or two ago. “This is an excellent oppor-
tunity to buy a condominium,” says Hashkes. tition with cash buyers, and properties leaving
“So, where you’ve seen [single-family] home the market at such a rapid pace,” says Law-
prices appreciate over the last 12 months, con-
dos have just been going up since the begin-
ning of the year.”
Additionally, the technology that became tions of this trend are uncertain. The horrific president of Olshan Realty Inc. and Olshan
a necessity because of COVID has changed tragedy of the collapse at Champlain Towers Group LLC, says that the luxury sector is see-
the experience of apartment hunting—and by in Surfside, Florida, has sent a ripple of panic ing the biggest surge since her agency began
most accounts, the changes are for the better. through the high-rise condominium market. tracking such data in 2006, partially because
Tours are happening online, through photo While this might create a burst of inventory of the size of the units being purchased.
and video sharing, or via teleconferencing. as residents and investor-owners look to sell
Buyers, says Spreen, can narrow down their in the short-term, it remains to be seen how fore,” says Olshan. “We have gone 14 weeks
searches at their realtor’s office or at home, much effect—if any—this will have on pricing with contracts signed at $4 million and above
saving in-person visits for properties in which and on buyers’ interest in this type of housing. in Manhattan. People are buying condos—
they are truly interested. This makes the pro-
cess easier for agents as well: No more Sun-
days spent open-house-hopping. No more sist,” according to Joel Kan, associate vice average price for these condos is higher than it
taking clients to see a unit they really have president of economic and industry forecast-
no intention of putting an offer on. Advance ing at the Mortgage Bankers Association. The [larger], of course the price is going to rise.”
scheduling and limited walk-throughs makes ever-rising costs of labor and materials, plus a
things easier on buildings and associations, current labor shortage, are putting a prover-
too. What began as an adaptation to dire cir-
cumstances definitely seems to be a trend with
staying power.
The Leaps
Where Northern cities like Chicago, New increased activity in the housing market na-
York, and Boston saw a distinct outward mi-
gration of residents during the early days of sionals predict a change in this environment. consider,” she says. “Apartment size and out-
access to open space and favorable weather, it happening sooner rather than later. “Con-
veritable boom.
For example, the Miami Realtors Asso-
dip in February 2021, South Florida has been
one of the hottest markets going for the last United States was administered on December enter into fall. With the extremely contagious
year-plus. The migration of buyers from the 14, 2020, 48.8% of Americans have been fully Delta variant of the virus becoming the domi-
tion, noting that between March and April of trol and Prevention (CDC). Perhaps inspired in the clutches of this devastating pandemic.
this year alone, condo prices rose by at least by this tenuous progress, or perhaps limited Attitudes toward vaccination are competing
The year-over-year picture is even more ter part of a year, wealthy homeseekers are the world—and indeed, much of this country
remarkable. Between April 2020 and April not hesitating to invest in luxury co-ops and as well—stymying the effort toward that elu-
Dade, that number
234.2%. Median con-
do sales prices climbed in the two counties expanding or relocating to Miami as a driver dicts more Florida buyers from Latin America
Florida Realtors points out that the pricing ward, sales of condo units for $1 million and from the Northeast and Silicon Valley. New
disparity can partly be attributed to using April up jumped 473%. (Yes, you read that correct-
to historic levels (as well as to high-inventory ers from Latin America as well. The outlet with deals intended to unload stagnant inven-
Florida and Tampa Bay, 50%–60% of condo many countries in the region face political and knees, people are making changes to their life-
While this is good news for sellers, buy-
ers—particularly
first-time
homebuyers
looking to finance their purchase—are facing American buyers,” says Danny Hertzberg, people will be able to continue working re-
in particular are having trouble securing that Miami real estate brokerage firm. “Today, we offices? Will views command as much value
ing not enough affordable properties, compe-
rence Yun, chief economist for the National virus’s onset, a reinfusion of sorts appears to petitive will require constant reassessment of
Association of Realtors (NAR).
The trajectory and longer-term implica-
On a national scale, data suggest that “in but what makes this period of time different
the short-term, inventory shortages will per-
bial wrench in new construction nationwide.
Shrinking inventory isn’t the only prob-
lem. While interest rates have reached historic pocketed buyers. “Outdoor space, the size of
lows in recent months, sparking some of the the condos, and the fact that we may need
tionally, many real estate and financial profes-
fastest pace in more than 12 years and may
lead to higher mortgage rates,” he says.
The Grandes-Jetés
Since the first COVID-19 vaccine in the parts are seeing their biggest surges yet as we
cording to the U.S. Centers for Disease Con-
from other mega-bucks purchases for the bet-
condos.
The Miami Realtors
Association cites an in-
flux of out-of-state resi-
dents following the grow-
ing number of finance activity in the U.S.
and tech firms that are
of luxury home purchases in the area. In Bro-
The
Miami Herald
reports a surge in buy-
indicates that affluent South and Central tory.
social upheaval, as well as a spotty rollout of styles and to their priorities in profound ways,
the COVID-19 vaccine.
“A few months ago we had zero Latin real estate long into the future. How many
have several contracts with Central American as space, especially outdoor space? What
and South American buyers.”
In other urban areas that were reportedly estate pros advise that to meet this moment,
bleeding wealthy homeowners at the corona-
be taking place at this stage of the pandemic. promotional practices and a willingness to
New York real estate expert Donna Olshan, adjust accordingly.
“We’re seeing a streak we’ve never seen be-
is that people are buying larger condos. The
has been in the past, but because the size is 8%
Vicki V. Negron, a licensed associate bro-
ker with Corcoran in Brooklyn, adds that
outdoor space, whether common or private,
is another determinant of interest for deep-
to be working from home indefinitely, or at
some point again, are all important factors to
tion [near] to transportation used to be.”
The Future
While parts of the U.S. began turning a
corner on coronavirus infections and hos-
pitalizations this spring and summer, other
nant strain and the majority of Americans
remaining unvaccinated, we are clearly still
with access and availability in some parts of
sive “herd immunity.”
Still there is an abiding sense of hope that
fall will bring a complete reopening of offices,
schools, and international borders, and with it
the resumption of “normal” co-op and condo
As travel restrictions ease, Hertzberg pre-
as well as Europe, along with more interest
York realtors are hoping that as the interna-
tional buyer returns, the Big Apple might offer
the best bang for the buck (or peso, or yen, or
riyal), as sponsors are “meeting the moment”
Most of all, as the country tip-toes out of
and this will have implications for residential
about ‘location, location, location’? The real
flexibility in marketing is key. Staying com-
n
Darcey Gerstein is Associate Editor and Staff
Writer for CooperatorNews.
HOW HAS COVID...
continued from page 1
“I think it’s actually a
great time to be a buyer.”
—Gail Spreen