Elmhurst Real Estate Guide (Q4 2020) by Kelly Stetler Real Estate

Q4 2020

ELMHURST

LOCAL REAL ESTATE GUIDE

OPENING NOTE To say this past year didnâ&#x20AC;&#x2122;t go as planned would be a huge understatement. So many of our families, friends, neighbors and colleagues experienced childcare and education uncertainty, work-related concerns, sickness or loss of loved ones along with many other pandemic-related issues. It is hard to begin talking about real estate without acknowledging these struggles and emphasizing the importance of taking care of each other and supporting local. As was the case for much of 2020, there is a shortage of houses for sale. Demand is still strong as a result of recordlow mortgage rates and shifting preferences toward the suburbs. If you are thinking about selling your house, there is no need to wait until the spring. The potential buyer is very likely searching for a home in your part of Elmhurst right now. For the cover I chose historic Wilder Mansion. I was excited to see it recently won The Knot Best of Weddings 2021! All my best,

630.750.9551 kelly.stetler@compass.com www.kellystetlerrealestate.com

WHATâ&#x20AC;&#x2122;S INSIDE 8

FEATURES

New Listings

Getting a Great Home Loan

Contracted & Closed

New Construction

Home Inventory

Contract Time

Price Discounts

Closed Sale Prices

Price Per Sq. Ft.

Protecting Your Pre-Approval (John Noldan, Guaranteed Rate)

Preparing to Sell Getting Ready to List Your House (Kelly Stetler, Compass Real Estate)

Key Transaction Terms

Improving the Terms of Your Offer (Themis Katris, The Katris Law Group)

Great Rooms

A Room that Lives Up to its Name (Michelle Polay, Polay Interiors)

Interest Tax Deductions

Interest Deductions for Tax Year 2020 (Ryan Lynch, Sikich)

EVERY ISSUE 3

METHODOLOGY Overview of Terms and Elmhurst Submarkets NORTH CLOSED: closed transaction reflecting the final sales price (does not include any seller credits)

(North of North Ave.)

CONTRACTED: contingent or pending transaction reflecting the latest asking price CONTRACT TIME: number of days between the first list date and the contracted date (does not include time from contract to close)

CENTRAL WEST (Prairie Path to North Ave. and Rte. 83 to York St.)

CENTRAL EAST (Prairie Path to North Ave. and Hwy. 290 to York St.)

HOME INVENTORY: number of homes currently available for sale MEDIAN: middle value of a given dataset (all report values are medians, which are less impacted by outliers than averages) PRICE DISCOUNTS: percentage difference between the initial list and recorded sale price PRICE PER SQ. FT: ratio of the price to the square footage of a closed transaction as a relative price measure (factors in home size)

SOUTHEAST (Prairie Path to Butterfield Rd. and Hwy. 290 to York St.)

SOUTHWEST (Prairie Path to Butterfield Rd. and Rte. 83 to York St.)

Note: All figures represent detached single-family homes unless otherwise specified. Price range data based on the city of Elmhurst. Submarket figures based on the approximate areas identified on map above.

MARKET SUMMARY “Seller’s Market” Conditions Remain with Very Low Home Availability

Strong Buyer Demand

New Home Listings (Q4)

Contracted / Closed Homes (Q4)

Lower New Construction

New Home Permits (YTD)

29%

New build permits bottomed in Q4 with demo permits increasing

Fewer Available Homes

Dec. Month End Inventory (YoY)

40%

“Seller’s market” with 13+ year low of available homes this time of year

Short Market Times

Original List to Contract Days (Q4)

Narrow Price Discounts

Closed Sale Price Discounts (Q4)

Tight discounts of 2% – 4% or less of original list price

Increasing Sale Prices

Sale Price / Price Per Sq. Ft. (Q4)

Higher prices across price points and submarkets

36%

Less than 20 days across submarkets and price points (except $1M+)

NEW LISTINGS By Price Range

Rolling Last 12 Months (YoY%)

 New listings finished mostly down for 2020 (except $1M+ being slightly higher)  Q4 saw a strong increase in listings at less than $400K  December listings increased nearly 30% YoY in an otherwise lower activity month

600

 Expect an active early 2021 as owners consider listing sooner than later

500

<$400K

$400K – $699K

$700K – $999K

$1M+

446 (-18%) 400

Oct. – Dec. (YoY%)

371 (-10%) 300

-16%

$1M+

-20%

'20

$700K - $999K

100

'19

-3%

'18

'17

'16

$400K - $699K

157 (+3%)

'15

16%

'14

'13

200

'12

<$400K

244 (-10%)

'11

'10

'19

'09

'20

'08

Price Range

By Submarket

Rolling Last 12 Months (YoY%)

 Q4 showed significant variability in new listing activity across submarkets  Large number of new listings in North Elmhurst with big listing decline in the Southeast submarket

North

Central West

Southwest

Southeast

Central East

400

 After a soft November, new listings increased significantly in December driven by North and Central East

295 (+6%) 292 (-4%)

300

Oct. – Dec. (YoY%)

222 (-11%)

200

15%

Southwest

Southeast

-50%

'20

Central East

'19

-13%

'18

'17

'16

Central West

100

'15

44%

'14

'13

'12

North

146 (-28%)

'11

'10

'19

'09

'20

'08

Submarket

184 (-21%)

Contributed By:

LOAN APPROVALS John Noldan

Key Home Loan Tips for Low Rates and Fees

Stay Current on Existing Accounts

Use Your Credit as Normal

Call a Mortgage Loan Professional

Apply for New Credit

Let Bank Accounts Go in the Red

Consolidate Debt

Max Out Credit Cards

Withdraw or Deposit Large Sums of Money

Payoff Collections or “Charge-Offs”

Close Credit Card Accounts

Transfer Money Between Accounts

Make Career Moves

Do’s

Don’ts

Contributed By:

SALE PREPARATION Recommendations Before Listing Your House this Spring

Clean toilets, showers and bathtubs, wipe surfaces, mop floors, clean rugs, etc. Consider bringing in a cleaning service to ensure that your house looks great

Declutter and organize your space. When a house is clutter-free, buyers can focus on the home instead of overflowing closets and accumulating knick knacks. This also goes for the yard

Depersonalize by putting away most photos and personal items. Leave a few nice, framed photos to strike a balance between depersonalization and creating an inviting home Paint over any bright walls with neutral colors such as whites, light grays or light beiges. These shades will make the house feel bigger and more welcoming. Touch-up other areas as needed Fix items such as leaky faucets, wall cracks, squeaky doors, etc. and complete any overdue servicing (e.g. HVAC). Otherwise, buyers may think your house hasnâ&#x20AC;&#x2122;t been well maintained Stage your home, depending on the situation. Multiple studies show that staging a home helps sell faster and for more money. Interior staging is also relatively easy and affordable 9

CONTRACTED & CLOSED By Price Range

Rolling Last 12 Months (YoY%)

 Contracted & closed homes were up 37% across price ranges with broad increases in buyer demand  Despite the continued surge in activity, December contracts were down 25%+  Contracted & closed activity will be limited by the number of new listings

<$400K

$400K – $699K

$700K – $999K

$1M+

600 500

476 (+22%) 471 (+2%)

400

Oct. – Dec. (YoY%)

300 267 (+32%)

30%

$1M+

75%

'20

$700K - $999K

100

'19

43%

'18

'17

103

'16

$400K - $699K

143 (+38%)

'15

25%

'14

106

'13

133

'12

<$400K

200

'11

'10

'19

'09

'20

'08

Price Range

By Submarket

Rolling Last 12 Months (YoY%)

 Contracted & closed activity was higher across submarkets  Central West and Southeast Elmhurst saw minor increases whereas North and Southwest experienced 80%+ increases

North

Central West

Southwest

Southeast

Central East

400

 Central West submarket has been relatively flat for the last 5 years

340 (+23%) 322 (+27%)

300

Oct. – Dec. (YoY%)

243 (+29%) 200

32%

Southwest

83%

Southeast

'20

Central East

'19

'18

'17

'16

Central West

100

'15

80%

'14

'13

'12

North

'11

'10

'19

'09

'20

'08

Submarket

188 (+1%) 160 (+21%)

COMPASS LISTINGS

Under Contract

682 Mary Ct.

546 W. Crockett Ave.

227 S. Sunnyside Ave.

Selected Elmhurst Listings

$829K

~3,800

$620K

~3,600

LIST PRICE

SQ. FT.

LIST PRICE

SQ. FT.

LIST PRICE

SQ. FT.

5 / 4.1

4/5

BEDS / BATHS

CAR GARAGE

BEDS / BATHS

CAR GARAGE

BEDS / BATHS

CAR GARAGE

146 E. Adams St.

135 S. York St. #320

~3,500

799 S. Prospect Ave.

$1.249M

$610K

2,000+

$500K

2,500+

$435K

1,100+

LIST PRICE

SQ. FT.

LIST PRICE

SQ. FT.

LIST PRICE

SQ. FT.

3/2

4 / 2.1

2/2

BEDS / BATHS

CAR GARAGE

BEDS / BATHS

CAR GARAGE

BEDS / BATHS

GARAGE SPACES

DEAL TERMS

Contributed By:

Increasing Your Chances of Buying Success in Today’s Market Earnest Money

What is it?

  

Offer strategy

 



Contingency

A deposit buyers commit to when going under contract Usually about 2% – 4% of the purchase price Money is typically held by the seller's broker or a title company, to be used toward the buyer’s down payment and closing costs



If buyer backs out for any contingency in the contract, money is returned to buyer Keep in mind if buyer decides not to buy the house for any reason not in the contract, the seller can keep it Make your bid stand out by offering more earnest money; think 5%+ of the price



Closing

Contingency means there's something the buyer must do for the process to go forward, like selling an existing home Contingencies often also include a home appraisal, home inspection and loan approval



Contingencies protect the buyer by providing the ability to back out if something goes wrong, typically without losing earnest money Fewer contingencies are better for the seller – remove what you are comfortable with to create offer certainty



Terms such as “closing” and “settlement” refer to the finalization of a home purchase / sale Common time frames are 30, 45 and 60 days

Timing of a sale might matter more to a seller than getting top dollar for their house Suggesting a flexible close date will appeal to sellers who have yet to find a place to move as well as those that may need to move quickly

NEW CONSTRUCTION Permit Activity

Rolling Last 12 Months (YoY%)

 Nearly 1,100 new home permits since 2010  Permits have declined after completion of 55+ new homes at the prior hospital site  New build permits appear to have reached a near-term bottom in October

New Home Permits Issued

Demo Permits Issued

160

 Rising demo permits (outpacing new home permits) suggest higher activity in 2021 120

Jan. – Nov. (YoY) 100

91 88

82 81

25 0

75 (-14%) 66 (-26%)

YTD '17

YTD '18

YTD '19 YTD '20

New Home Permits Issued Demo Permits Issued

'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 14

HIGHLIGHTED SALE Closed in Q4 2020 â&#x20AC;&#x201C; Southwest Elmhurst

Sold By: $1,463,600 SALE PRICE

100%+ SALE / LIST PRICE

$356 PRICE PER SQ. FT.

5 / 4.1 BEDS / BATHS

4,110 SQ. FT.

Distinguished brick and siding home with three-car tandem garage on quiet treelined street in highly sought-after Lincoln school neighborhood 15

REMODELS Permit Activity

Rolling Last 12 Months (YoY%)

 Elmhurst homes are often added to and rehabbed given a lack of open lots

Addition Permits Issued Interior Remodel Permits Issued

 Addition and remodel activity is more stable generally than new builds  Remodels have declined the last four years

200

 Additions moving higher while remodels show more uncertainty going into 2021 150

Jan. – Nov. (YoY%) 180

162

151

100 133

123

120 60 0

YTD '17

30 YTD '18

131 (-5%)

YTD '19 YTD '20

Addition Permits Issued Interior Remodel Permits Issued

45 (+41%)

'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 16

Contributed By:

GREAT ROOMS Making Sure Your Great Room Lives Up to the Name

What Makes This Space Great? Multi-functional Living and Dining Space for Everyday Use Open Floor Plan with Vision to the Kitchen Amazing Natural Light Everywhere You Look Geometric and Organic Patterns Following the Same Color Story Elegant Coffered Ceiling with Visual Appeal and Spaciousness Unique Accent Table Teamed with Sleek Rectangular Coffee Table 17

HOME INVENTORY By Price Range

Dec. Quarter End (YoY%)

 Available homes have declined significantly with limited new listings  Inventory is particularly limited at price ranges above $700K  Home inventory remains at 13+ year lows

<$400K

$400K – $699K

$700K – $999K

$1M+

200

 Scarce inventory expected to continue driving “seller’s market” conditions 150

Dec. Trends (Relative%)

'20

'19

'19 '20 $400K – $699K $1M+

'18

34%

'17

'17 '18 <$400K $700K – $999K

38 (-25%) 37 (-18%) 18 (-57%) 17 (-63%) '16

24%

'15

30%

35%

'14

28%

'13

22%

28%

25%

16% 15%

'12

26%

23%

'11

25%

31%

17% 25%

'10

50%

21%

'09

75%

100

'08

100%

By Submarket

Dec. Quarter End (YoY%)

 Home inventory is meaningfully lower with all submarkets down ~20% – 40%+  Southeast Elmhurst has the lowest number of homes available with a 65% decline in inventory

'19

'18

'17

'16

Q4 '18 Q4 '19 Q4 '20 Central West Central East Southeast

'15

North Southwest

29%

'14

Q4 '17

25%

30 (-19%) 24 (-35%) 22 (-42%) 17 (-48%) 9 (-65%) '13

'12

22% 19%

22% 19% 22%

22% 17%

'11

25%

9% 24%

'10

24%

15% 22%

100

'09

50%

Southeast

'08

75%

13% 22% 18% 23%

Southwest

Central East

'20

Dec. Trends (Relative%) 10% 26%

Central West

150

 Relative home inventory in North Elmhurst has moved higher

100%

North

CONTRACT TIME By Price Range

Rolling Last 12 Months (YoY%)

 Days between listing date and contract signing have been low (mostly less than a month) for a few years  Homes $1M+ are more likely to be new construction versus other price ranges, which increases contract time

<$400K

$400K – $699K

$700K – $999K

$1M+

225

 Expect contract times to remain short given limited inventory and more demand 150

$700K - $999K

-82%

$1M+

83%

41 (0%) 18 (-31%) 16 (-11%) 15 (-55%) '20

-36%

'19

'18

'17

$400K - $699K

'16

-40%

'15

'14

'13

<$400K

'12

'11

'19

'10

'20

'09

Price Range

'08

Oct. – Dec. (YoY%)

By Submarket

Rolling Last 12 Months (YoY%)

 Contract time was less than 3 weeks across submarkets, representing large YoY declines  Elmhurst market moving incredibly fast to contract on new listings  Homes on the market for a month or longer could be overpriced or have other factors impacting time / interest

North

Central West

Southwest

Southeast

Central East

100

Oct. – Dec. (YoY%) 50

-68%

Southwest

-70%

Southeast

-33%

'20

Central East

'19

-72%

'18

'17

'16

Central West

21 (-19%) 19 (+6%) 17 (-32%) 16 (-41%) 14 (-48%)

'15

-32%

'14

'13

'12

North

'11

'10

'19

'09

'20

'08

Submarket

PRICE DISCOUNTS By Price Range

Rolling Last 12 Months (YoY%)

 Sales closed at 96% – 97% of original list price for 2020 based on continued strong buyer competition  Homes priced $700K – $1M saw nearly no discount to asking price for the quarter based on very low inventory

<$400K

$400K – $699K

$700K – $999K

$1M+

100%

 Price discounts expected to remain narrow given limited home availability

97% (0%) 97% (0%) 96% (0%) 96% (+1%)

95%

$700K - $999K

99%

96%

$1M+

95%

97%

-2%

85%

'20

'19

97%

'18

98%

'17

$400K - $699K

'16

'15

95%

'14

96%

'13

<$400K

90%

'12

'11

'19

'10

'20

'09

Price Range

'08

Oct. – Dec. (YoY%)

By Submarket

Rolling Last 12 Months (YoY%)

 Price discounts have been mostly consistent across submarkets  Limited differences reflect appeal of Elmhurst overall as well as each submarket  Discounts tightened across submarkets, except the South (which was flat)

North

Central West

Southwest

Southeast

Central East

100%

 Buyers and sellers meeting at 3% – 4% or less than the original asking price

97% (+1%) 97% (+1%) 97% (+2%) 97% (+1%) 96% (-1%)

95%

Central East

96%

95%

Southwest

97%

98%

Southeast

96%

85%

'20

'19

96%

'18

97%

'17

Central West

'16

'15

96%

'14

98%

'13

North

90%

'12

'11

'19

'10

'20

'09

Submarket

'08

Oct. – Dec. (YoY%)

Contributed By:

TAX DEDUCTIONS

Ryan Lynch

How Much Interest can be Deducted for 2020 Tax Year?

IRS Categories / Deduction Limits

Does My Home Qualify?

Mortgages Taken Out on or After Dec 16, 2017

Interest paid on mortgages in this category is only deductible up to the proportion of the mortgage that comprises $750K (or $375K if your filing status is married filing separately). To qualify, the mortgage must be to “buy, build or substantially improve your home” (referred to as home acquisition debt)

 Main home (where you live most of the time) always qualifies

Mortgage Taken Out on or After Oct 14, 1987

Interest paid is only deductible up to the proportion of the mortgage that comprises $1M (or $500K if your filing status is married filing separately). Mortgages must also be home acquisition debt

o If not rented out, it counts even if you don’t live there during the year

Homeowners may deduct interest paid on HELOC debt up to $100K if the loan is used to improve or purchase a home (further the debt is included in the $750K or $375K limits described above). A HELOC used for other purposes (e.g. college, vacations or other personal purchases) does not qualify the interest to be tax deductible

o If rented out, it counts only if you lived there for the longer of either 14 days or 10% of the number of days it was rented

Home Equity Line of Credit (HELOC)

Note: Consider other types of payments for deductions such as private mortgage insurance as well as mortgage points.

 Second homes (only one can be claimed) subject to rent test:

CLOSED SALE PRICES By Submarket  Sale prices were mostly higher in 2020, led by a large increase in Central West

Rolling Last 12 Months (YoY%)

 Central West saw higher prices from both larger homes and increasing per sq. ft. value

North

Central West

Southwest

Southeast

Central East

 South saw lower prices despite higher price per sq. ft. due to smaller home sales

$700K

 Limited homes available and new / updated homes expected to push prices higher

$600K

$590 K (+11%)

$500K

$540 K (+2%) $510 K (+2%) $475 K (+4%)

Oct. – Dec. (YoY%)

$400K '20

'19

North

$408K

$326K

25%

Central West

$570K

$430K

32%

Central East

$575K

$688K

-16%

Southwest

$473K

$542K

-13%

Southeast

$405K

$450K

-10%

$300K $200K $100K

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

Submarket

$370 K (+2%)

PRICE PER SQ. FT. By Price Range

Rolling Last 12 Months (YoY%)

 Price per sq. ft. trend was higher across all price ranges for the quarter and 2020 (except $700K – $1M which was flat for the year)  Entry level and teardowns saw the largest increases in pricing with strong competition  Homes $1M+ re-approached record levels  Pricing expected to continue moving higher into 2021 based on limited supply

<$400K

$400K – $699K

$700K – $999K

$1M+

$350

$308 (+4%)

$300

Oct. – Dec. (YoY%) $244 (+2%) $240 (0%) $228 (+3%)

$250

$244

$235

$1M+

$311

$295

$150

'20

$700K - $999K

'19

'18

$237

'17

$245

'16

$400K - $699K

$200

'15

'14

$209

'13

$227

'12

<$400K

'11

'10

'19

'09

'20

'08

Price Range

By Submarket

Rolling Last 12 Months (YoY%)

 Most submarkets saw higher prices for the quarter; North Elmhurst experienced a slight decline  Central West and Southeast Elmhurst saw the largest increases in 2020  North Elmhurst remains on the lower end of price per sq. ft. and has been relatively stable the past few quarters

North

Central West

Southwest

Southeast

Central East

$300

$259 (+3%) $257 (-1%) $251 (+5%) $247 (+7%)

$250

Oct. – Dec. (YoY%)

$218 (-2%)

$247

$241

Southwest

$277

$264

Southeast

$251

$231

$150

'20

Central East

'19

13%

'18

$216

'17

$245

'16

Central West

'15

-1%

'14

$219

'13

$216

'12

North

$200

'11

'10

'19

'09

'20

'08

Submarket

COMPARING THE SUBURBS Analyzing Sale Price Growth Over Time

Median Closed Sale Prices Total Growth (%)

25%

Elmhurst is a top Western Suburb for price appreciation

1-Year

20% 15.2%

15%

11.6%

10% 5.0%

11.2%

3-Year

5-Year

17.5% 14.2% 11.1%

6.2%

3.9%

3.0%

6.3% 1.0%

3.7% 3.3%

-0.2% -2.6%

-5% -10% -8.3% -8.9%-8.4% -15% Clarendon Downers Hills Grove

-8.6% -9.2% Elmhurst

Glen Ellyn

Hinsdale

Oak Brook

Western Springs

Median Price

$565K

$390K

$473K

$461K

$925K

$740K

$624K

Price / Sq. Ft.

$239

$203

$242

$212

$254

$201

$259

Implied Sq. Ft.

2,364

1,921

1,952

2,176

3,642

3,682

2,409

HOUSE HUNTING Selected Current Clients Looking to Buy in Elmhurst

Buyer #

Price Range

Submarket

Minimum Features

Time Frame

Pre-Qualified Sale Contingency

$900K - $1.1M Central / South

4 bed / 3 bath

ASAP

Yes

Yes; Contracted

$750K - $950K

Central

4 bed / 3 bath

1 - 3 Months

Yes

Yes; Listed

$600K - $650K

Open

3 bed / 3 bath

3 - 6 Months

Yes

$500K - $550K Central / South

3 bed / 2 bath

3 - 6 Months

Yes

$425K - $475K

Open

3 bed / 2 bath

ASAP

Yes

Yes; Contracted

$350K - $400K

Open

3 bed / 2 bath

1 - 3 Months

Yes

$350K - $400K

Open

3 bed / 2 bath

ASAP

Yes

$325K - $375K

South

3 bed / 2 bath

3 - 6 Months

Yes

Do you have a house that meets a buyerâ&#x20AC;&#x2122;s preference above? Please reach out to quickly and quietly match with one of our buyers!

SEEN AROUND ELMHURST Our Community Involvement in Q4 2020

OUR CONTRIBUTORS Special Thanks to Our Contributors

John Noldan EVP, Mortgage Lending

Themis Katris Managing Partner

630.290.6251 jnoldan@rate.com @johnnoldan

708.351.1199 tk@katrislaw.com @themi_the_closer

NMLS License #2611; NMLS #193680

Michelle Polay Owner

Ryan Lynch Director

630.833.2331 michelle@polayinteriors.com @polayinteriors

331.229.5535 ryan.lynch@sikich.com

e2Photography generously provided the cover photo. Image is copyrighted. www.e2photo.net

www.compass.com

Compass is a licensed real estate broker and abides by federal, state and local equal housing opportunity laws. All material presented herein is intended for informational purposes only, is compiled from sources deemed reliable but is subject to errors, omissions, and changes without notice. Sources include Midwest Real Estate Data LLC and the Elmhurst Community Development department. This is not intended to solicit property already listed.

Elmhurst Office 103 Haven Road Elmhurst, IL 60126 630.750.9551 kelly.stetler@compass.com www.kellystetlerrealestate.com