>> 2021 WAS A BANNER YEAR FOR
THE HOUSES MARKET IN METRO
CHICAGO.
REALTORS SOLD MORE HOMES THAN
EVER AS PRICES ROSE AT RATES
SINCE THE EARLY 2000'S AND
FUELING THAT WAS LOW INTEREST
RATES AND FOLKS LOOKING TO MAKE
PANDEMIC INSPIRED MOVES TO
LARGER HOMES AS REMOTE WORKING
BECAME THE NORM FOR MANY.
JOINING US ARE DENNIS REDKIN,
RESIDENTIAL REAL ESTATE REPORTER
FOR CRAIN'S CHICAGO BUSINESS,
AND GWENDOLENE NEWTON A REAL
ESTATE AGENT AND PRESIDENT OF
THE DEARBORN REALTORS BOARD AN
AFRICAN-AMERICAN REAL ESTATE
TRADE ASSOCIATION.
THANK YOU FOR JOINING US.
DENNIS WELCOME BACK LET'S START
WITH YOU PLEASE.
WHY WAS 2021 SUCH A FRENZIED
YEAR FOR THE CHICAGO REAL ESTATE
MARKET?
>> BECAUSE EVERYBODY WANTED TO
MOVE TO A DIFFERENT HOME.
IF I HAD TO WORK AT HOME, I HAD
MY KIDS IN A SCHOOL ROOM AT
HOME, WORKOUT AT HOME, IT WAS
VERY LIKELY THAT I DIDN'T HAVE
THAT SPACE IN THE PLACE I WAS
LIVING.
AND WITH VERY LOW INTEREST RATES
I COULD IN MOST CASES I COULD
AFFORD TO MAKE THAT MOVE.
WE FINISHED 2021 WITH MORE HOME
SALES IN THE CHICAGO AREA THAN
THERE HAVE EVER BEEN.
IN DECEMBER WE PASSED 2005 WHICH
WAS THE HEIGHT OF THE LAST
HOUSING BOOM.
WE PASSED THE SALES VOLUME
RECORD FROM THAT YEAR BECAUSE
ANYBODY WHO COULD TRADE HOUSES
DID.
>> AND GWENDOLENE NEWTON WAS
2021 JUST AS GOOD A YEAR FOR
PURCHASING A HOME FOR BLACK
BUYERS PURCHASERS?
>> HI AND THANK YOU SO MUCH FOR
HAVING ME ON THIS EVENING.
THE BLACK BUYER EXPERIENCE WAS A
LITTLE BIT DIFFERENT.
WE DID EXPERIENCE WHAT I CALL
THE PANDEMIC PANDEMONIUM WHERE
YOU HAD A FLORENCESY OF BUYERS
OUT THERE BUT THERE WERE
STRUGGLES IN THE AREA FOR BUYERS
BEING PREAPPROVED FOR LOANS.
FHA VERSUS CONVENTIONAL.
COMING UP WITH DOWN PAYMENTS ET
CETERA.
AND THEN WITH THE APPRAISAL
ISSUES THEY WERE ALWAYS SEVERAL
HURDLES AND FACTORS THAT BLACK
BUYERS HAD TO OVERCOME.
>> AND THERE'S REPORTING AS WELL
ABOUT BLACK SELLERS AND THE
CHALLENGES THEY HAVE HAD WITH
APPRAISALS.
>> DENNIS, THE MEDIAN SALE PRICE
IN CHICAGO METRO ROSE 12% IN
2021 UP TO 300,000.
CAN THE MARKET MAINTAIN THAT
KIND OF PACE IN 2022?
>> YOU KNOW IT PROBABLY CAN
BECAUSE WHILE WE'VE HAD
DOUBLE-DIGIT PRICE GROWTH WE
HAVE BEEN GROWING IN THE 12%
RANGE THINK OF PHOENIX THEY HAVE
BEEN GROWING IN THE 32% PRICE
RAGE.
A YEAR TODAY HOMES COST 32% MORE
IN PHOENIX THAN THEY DID A YEAR
AGO.
THOSE PLACES ARE IN A BUBBLE.
PHOENIX, SAN FRANCISCO, SEATTLE,
WE'RE GROWING AT OUR PRICES ARE
GROWING AT A RAPID RATE BUT
COMPARED TO MOST OTHER BIG
CITIES IT'S NOT SO BIG.
THERE IS A STUDY OUT THAT SHOWS
THAT CHICAGO IS ONE OF THE ONLY
MAJOR U.S. CITIES WHERE HOME
PRICES HAVE NOT RISEN AS FAST AS
WAGES WHICH IS IS TO SAY YOU CAN
AFFORD MORE HOUSE THAN YOU COULD
WHILE AFFORDABILITY IS RUNNING
AWAY FROM PEOPLE IN OTHER CITIES
WHERE HOME PRICES ARE GROWING
FASTER THAN WAGES.
>> AND BEFORE WE MOVE ON,
DENNIS, YOU HEAR HOUSING BOOM
AND COMPARISONS TO 2005 AND
PEOPLE GET NERVOUS BECAUSE WE
ALL KNOW WHAT HAPPENED AFTER
THAT HOUSING BOOM IN THE
MID-2000'S ARE WE IN ANY DANGER
HERE?
>> WE ARE NOT GROWING AS FAST
OUR PRICES ARE NOT GROWING AS
FAST AS THEY WERE AT THAT TIME.
BUT ALSO MOST OF THIS IS
APPRAISING OUT.
A LOT OF IT IN 2005 WAS THERE
WERE THE LOW OR NO DOCUMENT
LOANS.
THERE WAS PREDATORY LENDING IN
BLACK COMMUNITIES AND ELSEWHERE.
THAT WAS FORCING LENDING ON TO
PEOPLE WHO PROBABLY COULDN'T
AFFORD IT.
THERE ARE A LOT OF RULES IN
PLACE FOR LENDING THAT DID NOT
EXIST THEN THAT CAME IN TO BEING
BECAUSE OF THOSE PROBLEMS.
AND WE'RE NOT SEEING YET THE
FORECLOSE CRISIS COMING THE WAY
IT DID THE LAST TIME BECAUSE IT
APPEARS THAT PEOPLE ARE BUYING
ON THE INCOME THEY HAVE NOT ON
UNDOCUMENTED INCOME OR NO
DOCUMENT LOANS.
>> GWENDOLENE NEWTON
HISTORICALLY AFRICAN-AMERICANS
HAVE BEEN DENIED ACCESS TO THE
HOUSING MARKET AND THE
OPPORTUNITIES TO BUILD WEALTH
BECAUSE OF UNEQUAL ACCESS TO
FINANCING AND OTHER PRACTICES.
WHAT WOULD YOU SAY THE SITUATION
IS LIKE TODAY FOR SAY A YOUNG
AFRICAN-AMERICAN COUPLE LOOKING
TO BUY THEIR FIRST HOUSE?
>> WELL, A COUPLE THINGS AND IF
I CAN JUST TOUCH ON DENNIS
MENTIONED IN TERMS OF THE
FORECLOSE CRISIS.
THERE ARE SOME LEVELS OF RISK
AND BASED ON SOME OF THE
REPORTING THAT I HAVE READ OVER
THE LAST LIKE SAY 60 DAYS THERE
IS SOME INCREASE AND UPTICK IN
THE FORECLOSE SPACE FOR BLACK
HOMEOWNERS.
THAT IS NOT TO DISCOURAGE YOUNG
MILLENNIALS AND PEOPLE OUT
BUYING IN THE SPACE AT THIS
TIME.
I BELIEVE THAT WITH THE LOWER
INTEREST RATES THERE IS AN
OPPORTUNITY TO TAKE ADVANTAGE OF
PURCHASING A HOME AT THIS POINT.
BUT BECAUSE OF THE LACK OF
WEALTH AND THE DISPARITY BETWEEN
AFRICAN-AMERICAN HOUSEHOLDS AND
WHITE HOUSE HOLDS, IN ECONOMIC
AND FINANCIAL WEALTH, THAT
OFTENTIMES AFRICAN-AMERICANS
DON'T HAVE THE DOWN PAYMENT
RESOURCES.
SO THERE ARE SOME LOAN MOD --
LOAN PROGRAMS OUT THERE THAT DO
ALLOW YOU KNOW, DOWN PAYMENT
ASSISTANCE AND YOU CAN ALSO
ACCEPT GIFTS FROM FAMILY MEMBERS
WHICH HAVE ENABLED BLACKS
AFRICAN-AMERICANS TO PURCHASE.
BUT AGAIN, WHEN THERE IS A LACK
OF FINANCIAL STABILITY, BANK
ACCOUNT.
>> NOT AS EASY.
GWENDOLYN I WANTED TO GET THIS
ON YOU QUICKLY, YOU KNOW WE'VE
SEEN IN RECENT YEARS BLACKS
MOVING OUT OF THE CITY AND ALSO
FOLKS MOVED OUT OF THE CITY
BECAUSE OF THE PANDEMIC.
DO YOU THINK THESE TWO TRENDS
WILL CONTINUE WITH PEOPLE
LEAVING THE CITY?
>> YES.
BY ALL MEANS.
I HAVE BEEN WORKING WITH BUYERS
THAT HAVE BEEN RELOCATING TO THE
SUBURBS.
WHERE THEY ARE CRIME OR YOU
KNOW, JUST LIVING IN CLOSE
QUARTERS, CONDOMINIUMS,
APARTMENT LIFESTYLES WHERE
PEOPLE WANT TO HAVE SINGLE
FAMILY HOMES, AND BACKYARD SPACE
HAS BEEN A LARGE UPTICK DURING
THE PANDEMIC.
I'VE ALSO HAD PEOPLE RELOCATE
OUT OF STATE.
THEY HAVE WASHED THEIR HANDS OF
CHICAGO AND THEY'VE MOVED SOUTH
TO GEORGIA, FLORIDA, AND THEN
SOME TO ARIZONA.
>> AND SHIRLEY THEY HAVE --
SURELY THEY HAVE REASONS FOR
THAT.
WHAT ARE THE FACTORS THAT COULD
SLOW THE MARKET DOWN?
>> CRIME.
ONE OF THE THINGS I TRACK IS THE
VERY HIGH-END PART OF THE MARKET
AND UP AT THE TOP OF THE MARKET,
4 MILLION AND UP, WE HAD AN
AMAZING YEAR IN 2021.
THE AVERAGE NUMBER OF SALES IN A
YEAR AT 4 MILLION AND UP IS
51.5.
IN 2021 THERE WERE 100 SALES AT
THAT LEVEL FROM 4 MILLION TO THE
HIGHEST PRICE THE SALE CAME
RIGHT AROUND CHRISTMASTIME AT
12.55 MILLION.
SO OF THAT, 37 SALES WERE
DOWNTOWN CONDOS.
DOWNTOWN PENTHOUSES WHEN YOU ARE
TALKING $4 MILLION AND UP.
PEOPLE ARE STILL INVESTING.
PEOPLE OF MEANS AFFLUENT PEOPLE
ARE STILL INVEST UNWILLING REAL
ESTATE DOWNTOWN.
EVEN THOUGH WHAT YOU HEAR IS
THAT CRIME IS STOPPING PEOPLE
NOW THAT THERE IS A OBVIOUS
CRIME PROBLEM IN THE DOWNTOWN
NEIGHBORHOODS AND STOPPING
PEOPLE FROM BUYING.
>> DENNIS REDKIN WE'RE OUT OF
TIME.