Woodridge Housing Market Still Characterized by Lower Sales Prices, More Time on Market

Dan Peboontom purchased his Woodridge home on July 16, the same day his daughter was born. His family decided to move from their two-bedroom, one-bath Bolingbrook townhouse because they needed extra space for their two children.

With home prices much lower than they were five years ago, Peboontom and his family were in luck. They settled on a four-bedroom, 1.5-bath home on Young Court, within walking distance from Peboontom’s job as athletic supervisor at the Woodridge Park District.

The price? $230,000.

It’s a home Peboontom’s family could not have afforded in the past.

“A few years ago, it probably wasn’t even an option for us (to buy the house),” he said. “It wasn’t even worth looking for a home for us.”

Peboontom is one of many in the Woodridge area to experience lower home prices. As the end of the first quarter of 2011 nears, local real estate agencies said fewer homes are selling and those that do are taking longer to sell.

And while local real estate agents remain optimistic that pent-up demand will soon see a turning point in the housing market, they say it’s still very much a buyer’s market for now.

The Peboontom family purchased the home from Leslie Stuba and her husband, who had lived at the Young Court home for 24 years before deciding to move after her husband retired. The house was on the market for a year.

“I had a number of friends who had houses for sale,” Leslie Stuba said. “It makes you nervous and irritable, but we certainly were not in a financial bind. … We just wished the darn thing would sell. It’s too bad that the economy stinks. That’s just the way it goes.”

Stuba said she and her husband had to drop their home’s offering price to sell it.

“I probably wanted $60,000 more,” Stuba said.

But Stuba said she and her husband also benefitted from the low prices of property in their move to Newark, Ill., where the couple purchased 13 acres of land.

“We turned out getting a pretty good deal on the place we bought,” Stuba said. "The owner two years ago had been told to sell for $520,000. We paid $350,000.”

Peboontom said it took about six months to sell his Bolingbrook townhome, and the quick sale was lucky.

“We made just over $10,000 on the sale, which was the down payment on our new home,” he said. “We just got really lucky. One of my co-workers has been trying to sell a townhome that’s much nicer than ours in Plainfield, and she’s been waiting to sell for two or three years.”

The housing market in 2011

Comparing the housing market over the past year is easy for Chris Hochstedt, of Downers Grove-based Exit Real Estate Partners, which handles properties in Woodridge among other communities.

“2011 is far worse than 2010,” Hochstedt said. “It’s not looking halfway as good as 2010.”

Thirty homes were sold in Woodridge between Jan. 1, 2010 and March 13, 2010, as compared to 28 Woodridge homes sold during that time this year, according to Midwest Real Estate Data. In that same period, homes were on the market for an average of 144 days last year, as compared to 189 days in 2011. Average sale prices are down, from $288,464 in 2010 to $259,327 this year.

In a bright spot, sales of Woodridge condos or townhomes have seemed to improve. Eleven sold between Jan. 1 and March 13 this year, as compared with nine by the same point in 2010. However, those properties have taken longer to sell, at an average of 196 days on the market in 2011, as compared to 116 last year.

Average sale prices are also down for condos and townhomes, from $133,289 to $79,795.

According to Michael Mays, director of the village's Community Development Department, Woodridge condo owners have had trouble selling their units and have turned to renting them out.

(Click for full year-to-date 2010 and 2011 data here. To compare 2009’s end-of-year numbers with 2010, click here.)

Market times are longer in part because of the economy and stricter lending practices, Hochstedt said.

“Across the board at every price point, it’s much longer,” he said. “We had someone preapproved from one bank and then right before closing, something happened and it bruised their credit, and the lender wouldn’t give the money anymore.”

Hochstedt said there’s also no incentive to buy, since the expiration of the first-time homebuyer credit that awarded a maximum credit amount of $8,000 to buyers who entered into a binding contract by April 30, 2010.

Steve Kranz of Kranz Real Estate said his company had a nice spring last year because of that credit, but business dropped significantly after the deadline passed.

“We did 75 percent of our business in the first four months,” Kranz said.

Even with the boost, Kranz said home sales dropped 13 percent between 2009 and 2010—142 last year, down from 164 the year before. Now the numbers are dropping further.

“There’s been a drop off without the free money,” Kranz said. “Until you have that security with a job, you’re going to spend a lot of money getting a home.”

Kranz said he’s seeing sellers, but not buyers. He and three other realtors organized a free lunch last month, open to anyone who wanted to check out their properties. Nobody came.

“If agents aren’t out looking at homes, we don’t have buyers,” he said. “If they’re not even burning gas to come look at our properties, it’s not a good sign.”

Housing developments on hold

More opportunities to own property in Woodridge have been stymied by the economy, Mays said.

Several single-family home projects received Village Board approval during the past four years, he said, but construction never started because of the economy.

“With a couple of the smaller in-fill developments, we are beginning to see renewed interest by developers,” Mays said.

One single-family-home project on hold is Gallagher and Henry’s 108-lot subdivision, located northwest of Interstate 55 and Lemont Road.

There’s also the Pine Ridge condominium conversion, approved earlier this year. The village purchased part of the property to turn it into senior housing, under an agreement with the owner to turn the remaining apartments into 123 condos.

Expect more foreclosures

As homes stay on the market longer and fewer homes sell, Hochstedt predicts there will be as many, if not more, foreclosures in 2011. The reason, he said, is because of adjustable rate mortgages signed in 2004, 2005 and 2006.

Adjustable rate mortgages are offered with three-, five- or seven-year time periods, with five-year ARMs being the most common, Hochstedt said.

When a homeowner signs a mortgage with an ARM, they pay a certain interest rate. That interest rate and the mortgage payments then adjust after the allotted amount of time in accordance with an economic index.

The interest rate for a seven-year ARM signed in 2005 will increase from 4.5 percent to 7.5 percent in 2012, he said.

“Those people are going to be in a world of hurt unless they have gotten dramatic raises or switched careers,” he said. “Now all of a sudden when they’re not thinking about it, the next mortgage payment is dramatically different. Now they’re freaking out, and a lot of them can't handle it. What happens is they lose their home “

Hochstedt estimates the market was at its highest during the first quarter of 2006. Considering the seven-year ARM, he predicts foreclosures will begin to recede in the beginning of 2013.

Light at the end of the tunnel

Despite longer market times in 2011, Hochstedt said he believes interest in home buying is up, though the numbers haven’t reflected it yet.

Hochstedt said he’s recently seen multiple agents showing up to listings and people out on the street waiting to see a house—something he hasn’t seen in five years.

“The phones are busier this year,” he said. “There’s more activity in my office personally. It’s busier these two months than the entire year last year.”

Kranz said his company is also hoping the spring market will bring some more business its way.

“We're just kind of crossing our fingers here,” he said. “For March, April and May, we’re planning a lot of marketing and advertising.”

Besides, Hochstedt said, now is the best time to buy.

“I don’t think it’s going to get much better than this,” he said. “If you’re wanting to get a deal, it’s right now. If you wait a year and a half, it’s about all the time you have.”