Making Sense of Today’s Real Estate Industry Uncertainty

Oct 7, 2008 - Local builder Gallagher and Henry hosts industry professionals and provides insight into present-day housing market

Over and over, Ray Dahl was hearing the same story.

As sales manager at the Farmingdale Village Condominiums in Woodridge, a new luxury condo development near 87th Street and Woodward Avenue, potential buyers would enter his office at a crossroads: ready to buy but scared to sell. The same story would arise time after time: “I’m ready to move and I want the no-maintenance living a condo offers,” the prospective buyers said, “but I’m afraid I won’t be able to sell my house.”

Dahl could understand the concerns, yet determined it was time to provide some education and address the fear. Blanket statements about the nation’s housing woes, which lumped Boca Raton and Phoenix in the same category as Woodridge, were serving no positive purpose.

“People were unsure of so much and they didn’t know what all the media reports meant for them. We wanted to give some solid insight to help people better understand the issues,” Dahl said.

On Saturday, October 4, Dahl teamed with Farmingdale Village homebuilder Gallagher and Henry to host a complimentary seminar and brunch aimed at exploring trends in housing appraisal and market fluctuations. Over 30 guests gathered at the Farmingdale Village model to hear real estate appraiser David Salk and Chris Huecksteadt of Metrostudy, the nation’s leading housing market research firm, offer a brief presentation on the current state of the area’s real estate health and, more importantly, its implications for homeowners debating a move.

Huecksteadt’s presentation focused on minimizing the swelling fears about a real estate market in devastating turmoil. His company, Metrostudy, sends field researchers throughout a dozen Chicagoland counties to collect current data on marketplace trends. While national news reports tell of despair, Huecksteadt said the local numbers show concern but not chaos. In the last year, values have slid approximately three percent in Woodridge and surrounding communities, but that number falls on the heels of an annual growth rate of 5-7 percent in previous years.

“CNN and MSNBC have compelling stories, but those stories aren’t always applicable to our lives in and around Woodridge,” he said. “It’s always positive to get a dose of realism and localize the conversation, reminding people that one year in the real estate market is a short window of time.”

Huecksteadt urged individuals to recognize the promise of real estate even amid troubled times.

“It’s still a great time to buy a home because interest rates are at historic lows,” he said. “There are challenges, such as securing a loan and selling an existing property, but real estate is still a safe place to put your money, particularly for the long-term.”

Salk, head of Chicago-based David Salk Real Estate Appraisal, then defined market value, which is not, he noted, a neighbor’s listing price or a Realtor’s suggestion. As an appraiser, Salk finds market value by bringing an unbiased, objective, and detached perspective to a given home’s value. That figure protects the homeowner from overpaying on the market value of a property and can inform one’s future decisions, including a purchase.

Perry Brcenas was one of the guests in attendance. In 2005, he purchased his Woodridge home, thinking he and his growing family would step up to a bigger home by the end of 2008. The market’s recent slide has caused some consternation, however, and Brcenas wanted insight on the market’s outlook.

“The presentations confirmed what I thought: the market will recover... and we’ll sell and gain as we had anticipated,” Brcenas said.