"You" being the Victor in the quote "to the victor belong the spoils." Which means in a war or a contest, the winner also gets the booty or the treasure. Right now in Lake Forest, it is a very strong buyer's market. If you're a buyer, you're going to get a great price on a great home in a great location. I hope I don't lose some of you by talking specifically about Lake Forest, but instead, I hope you find this interesting. If you're a buyer considering some higher-priced (ish) homes, then you definitely need to read on. Let's start with a poor attempt to hook you in... (psssh, as if I needed it). I can help you buy a home in Lake Forest for 10% less than the list price.
This may seem a little crazy, me guaranteeing a pretty large discount for homes in one of the most prestigious suburbs. It's actually pretty simple. If it wasn't so obvious, I don't think I'd feel as confident about it either, but let me show you how I got there.
July 2016 was the 15th straight month of increased inventory in Lake Forest, and any agent with a listing (or several) in Lake Forest has been panicking, along with their sellers, since the middle of spring when the weight of the natural market's correction began to take place. Sellers are being forced to either take their homes off the market or decrease their prices dramatically.
Most people know that basing a decision on 1 statistic can lead to a bad one; therefore, my analysis of the Lake Forest market comes from many stats combined, not just one. However, there IS one statistic that speaks a little louder than the others, which we'll talk about later. (I'm so good at hooks!) I hope you like bar graphs...
- Median Sales Price
- % of Last List Price
- % of Original List Price
- Average Market Time
- Months Supply
- Number of Homes for Sale
To do this in a way that makes sense, I decided to compare the market stats of the 4 highest priced suburbs, of which, Lake Forest is surprisingly the cheapest! Nonetheless, we're dealing with similar markets regarding buyers and sellers financially.
Let's get to it.
Median Sales Price
These are some pretty high prices. These are the average sales prices for Lake Forest, Glencoe, Winnetka, and Kenilworth, and they are the highest of any Chicago suburb. When you're selling a home at or above these price points, you will have a limited number of buyers that can afford your home. For this reason alone, it's important to look at other areas that have expensive homes as well.
Percentage of Last List Price
This graph shows a percentage of the most recent list price at which properties sold. Say that 5x fast. This gives you an idea of how far sellers will come down from their current list price. As you can see, Lake Forest sellers come down on average 6.3% from the last listed price prior to accepting a contract. As we go through the graphs, you'll see some comparisons between Kenilworth and Lake Forest... this is one instance.
Percentage of Original List Price
This graph shows a percentage of the original list price at which properties sold. You can see that sellers in these markets need to come down at least 8% on average from where they decided to list the property. For Lake Forest and Kenilworth it's even more so, 10% and 13% respectively. You can see this is where my "bold" statement came from- it's an average, so there's no guarantee on EVERY home... but you're chances are pretty good.
Are you ready to save $76,000 on your Lake Forest home?
To give you a little perspective regarding the last 2 graphs, while keeping the first graph in mind, we're talking about a lot of money. 1% of the average sales price for these properties is $7000-$12,000. Dropping your price by 10% from $1M means coming down $100,000! Are you ready to save $76,000 on your Lake Forest home? (10% of $760k, keep up please). It's definitely not out of the question, and these graphs prove it!
Average Market Time
If you leave Lake Forest out of the graph for a second, and look at the other three towns, you'll see a pattern. Yes, Kenilworth is a little bit of an outlier here, but again as homes get more expensive, buyers are scarcer. You would expect Lake Forest to be even less, but it's higher than Glencoe and Winnetka, who are both significantly more expensive on average. Again pointing out a concern for sellers in Kenilworth and Lake Forest. Your home might take 6months to sell in Lake Forest, and almost a year in Kenilworth!
This statistic might not be something you've heard of before. This takes the average time to sell a home and divides it by the homes that are currently on the market. To simplify it, if there were no more listings, this is how many months it would take to sell what's currently listed. Again, you see a pattern as you get higher in price, but Lake Forest is well above Glencoe and Winnetka despite being a lower average sales price... further confirming a concern for sellers.
Thus far, both Lake Forest and Kenilworth have had similar statistics. Well, in the statistics world, you want to pull from as large of a sample as possible; the larger the sample the more accurate the numbers. Below is a graph that shows the current number of homes for sale. I think you'll see that it will be much easier for Kenilworth to correct their market than it will for Lake Forest. I'll explain more below.
Homes for Sale
As you can see this seems to be a bit of an issue for Lake Forest. This is that stat that speaks a little louder than the rest for me. Kenilworth has the opportunity to change their averages because we're working with a much lower volume. Since Lake Forest's inventory is such a large number, it's harder to impact the averages. This graph truly shows why Lake Forest is currently a buyer's market. This graph also explains why I can't make the same promise in Kenilworth. They don't have an inventory crisis, just a high price point and limited buyers.
Now, considering all of these statistics and factors. I don't believe that there is a problem with the town of Lake Forest, nor the Illinois suburban market as a whole. The town of Lake Forest and the benefits of being a resident are the proverbial spoils/booty/treasure you'll be getting along with winning the "war/conflict" that is negotiating a great price on a home. Click Top 10 Reasons to Move to LF to see why the current residents love their town so much.
This is simply a bad-timing situation for the town of Lake Forest. There are many sellers that don't NEED to sell their home, but yet decided to list it anyway; furthermore, those sellers are trying to get a premium price for their home... just to see if they can get it. Those types of sellers are hurting their own market by increasing the supply of homes and the average market time. They're also going to end up decreasing the % of list price (if they actually sell, the price will be much lower than their list price).
It's simply poor timing, too much inventory, too high of pricing, and outdated homes [...]
Contrary to my point, there are homes that are selling quickly and closer to list price. The graphs above are averages. So there's better and worse than the numbers you see. People are not running from Lake Forest for any particular reason. In fact, Lake Forest has some of the best tax rates around, and the best in Lake County--See my post here regarding property tax rates. It's simply poor timing, too much inventory, too high of pricing, and outdated homes owned by a baby boomer generation (lots of people).
If you're considering moving to suburbs in the 500k+ range, now would be a good time to check into Lake Forest. I believe that sellers are becoming more aware of the situation, and will start to lower their prices large chunks at a time, accept lower offers, and/or take their home off the market. This opportunity won't last forever, because the market will correct itself soon. I'm not trying to pressure you to buy... I don't want to be "that agent" that's always saying "buy buy buy!" However, I do believe this is an opportunity and there are going to be some great deals in Lake Forest relative to what you would have had to pay a year ago, and what you may have to pay next year.
Please reach out to me for help buying or selling.
Questions and comments are welcomed!
Thanks for reading,