john greene Realtor 2022 Market Outlook

2022

MARKET OUTLOOK

Will, Kendall, DuPage, & Kane Counties www.johngreenerealtor.com

TABLE OF CONTENTS 1

Introduction

3

National Market Outlook

5

Local Market - Demand Side

7

Local Market - Supply Side

9

Market Data by Town

15

New Construction Outlook

16

Commerical Outloook

18

About john greene Realtor

INTRODUCTION When the Covid-19 pandemic began in the spring of 2020, the outlook for real estate was grim.

Many of us real estate veterans began to plan for the worst. After all, the great recession was still fresh in our minds. While we did see a pretty sizable decrease in contract activity over that spring, by Memorial Day, the market was starting to roar back. I will not go as far as to say that nobody saw it coming, because a dear friend of ours, and one of the industry’s market trends thought-leaders, Steve Harney, predicted the outcome. He joined us for a virtual town hall in April of 2020 and he told us that "this was not the great recession, it was more akin to a serious weather event. The market would constrict severely for a quarter, or perhaps two, but we should all fully expect by the end of the year things would be right back to normal." Even coming from the most credible of sources, it was hard to believe. Turns out, he was spot on.

What none of us anticipated was just how enthusiastically the market would come roaring back. As Jerry Garcia, the lead singer for the Grateful Dead famously sang, “Goes to show you don’t ever know.”

None of us have a crystal ball, but if you pay particular attention to the market you can often spot trends. Those trends in the hands of a professional real estate expert can be incredibly beneficial to the clients they serve.

Last year we celebrated the 45th anniversary of john greene Realtor. When my father founded this company, he started with a simple principle and slogan, “A Better Way”. A better way to him meant creating an elevated real estate experience. It meant hand-selected agents coupled with local expertise that created signficant value for our clients.

We hope you find in value in this year's market outlook report. Thank you for reading.

Sincerely,

Tim Greene President and CEO, john green Real Estate

NATIONAL REAL ESTATE PICTURE

The main takeaway when looking at national level data is that across the board we are experiencing strong demand and a lack of inventory. It’s important to keep in mind that real estate is truly hyper-local. Every market across the country has different dynamics, and within those markets, there are sub-markets with different dynamics. One noticeable difference to point out is that many markets across the country have been experiencing large year-over-year price appreciation gains for the better part of a decade, where our local market only saw those large gains in the past two years.

2022 OUTLOOK

This year is poised to be another strong year across the country. In many markets though, analysts are closely watching home affordability. Among other factors, a historically low mortgage rate environment over the past decade has lent itself to rapid price appreciation. All signs point towards interest rates climbing throughout 2022. How much they climb could have an impact on demand and work to bring the housing market into more of a balance.

When looking at inventory, it’s important to point out how steady inventory levels behaved pre-pandemic. As you will see below, the post-pandemic real estate market has had drastically different dynamics. In 2021 inventory levels reset at a significantly lower level from what we saw pre-pandemic. This has created a large market imbalance that has made way to rapid price appreciation and an ultra-competitive environment for homebuyers. In 2022, we anticipate that inventory levels will look similar to 2021.

RESIDENTIAL

DEMAND SIDE

LOCAL MARKET

Many people point to strong demand as fueling the bullish real estate market we have experienced. Our best data for demand-side activity has traditionally been contract activity and closed sales. As a result of the pandemic, our data partner ShowingTime, created a real time look at showing activity. This has become a vital piece of data. It gives us a lead indicator of where demand is headed, as showings today turns into contract activity in the upcoming weeks and months.

One of the key insights we have gleaned from this data is that the buyer traffic in 2021 mirrored that of 2019, pre-pandemic. This indicates that rapid housing market is not a result of a surge in demand.

HOMES SOLD

Y/Y CHANGE

43,203

9.1%

2021

+ 3,933

AVERAGE MARKET TIME

Y/Y CHANGE

49

-37.9%

Showings Per Listing

Y/Y CHANGE

2021

12.4 2021

Decrease of 30 Days

37.1%

Increase of 4. showings per listing

LOCAL MARKET DEMAND SIDE 2022 OUTLOOK We anticipate demand to remain on par with 2021. A rising interest rate environment will be the biggest signal we will keep our eye on. While forecasted increases will not drastically impact affordability, they could spurn more urgency and increase the buyer pool in the short term. At some point, a combination of rapid appreciation and rising interest rates could put a damper on buyside activity.

SUPPLY SIDE

LOCAL MARKET

The biggest story in the current housing market cycle continues to be the supply side. Inventory levels have remained pretty consistent throughout the past decade and all of that drastically changed once the Covid-19 pandemic hit.

A convergence of many factors, including the tight inventory environment has created a rapid real estate market that has resulted in some of the highest year-over-year home price appreciation gains our market has ever seen.

ACTIVE INVENTORY

Y/Y CHANGE

4,268

-59.3%

Properties Available December 2021

,233 less

NEW LISTINGS

Y/Y CHANGE

55,865

-3.8%

MONTHS SUPPLY

Y/Y CHANGE

1.8

-51.4%

2021

2021

2, 37 less

Decrease of 1.7 Months

LOCAL MARKET SUPPLY SIDE 2022 OUTLOOK We anticipate the current supply-side dynamics to continue into 2022. While a major lift in inventory would be gladly accepted by the local housing market, we don’t foresee any major inventory spikes. There was some anticipation the mortgage forbearance program would create a swell in inventory in 2021, but that did not materialize. The other potential spike would come from new construction starts, and while builders and developers are becoming more active, much of that forecasted inventory will not materialize in 2022.

Naperville Naperville continuously ranks as a top community in the United States in which to raise a family.

Also known for the best public schools, Naperville offers two public school districts, Community Unit School District 203 and Indian Prairie School District 204. The city has the best public library system in the United States, offering access to three public libraries. Downtown Naperville is known for its stores, restaurants, businesses, and the beautiful Riverwalk.

There is an array of transportation options available, including Pace Bus, Metra, and Amtrak. Two commuter rail stations available, one near downtown Naperville and one on Route 59.

Naperville makes it easy for you to visit and offers experiences like no other!

ACTIVE INVENTORY

Y/Y CHANGE

311

-48.8%

NEW LISTINGS

Y/Y CHANGE

3,981

-10.8%

Average Market Time

Y/Y CHANGE

40

-47.4%

Properties Available December 2021

2021

Oswego Located about 45 miles west of Chicago, Oswego is where families come together.

With over 40 miles of trails and over 40 parks, the Oswegoland Park District is perfect for family strolls and bike rides.

Downtown Oswego offers a wide range of dining and shopping options, along with museums and parks scattered throughout.

Oswego is located within Kendall County, and is the largest municipality in this county.

The village offers schools that are ranked within the Top 10% in Illinois. One of the fastest growing communities, yet provides a small town, family feel!

ACTIVE INVENTORY

Y/Y CHANGE

76

-51.6%

NEW LISTINGS

Y/Y CHANGE

1,083

-8.9%

Average Market Time

Y/Y CHANGE

27

-59.7%

Properties Available December 2021

2021

Plainfield A flourishing and active village, Plainfield is located about 37 miles southwest of Chicago.

Easy access from several state highways and interstates. With plenty of stories to share, Plainfield is known as Will County’s Oldest Community. The Village also claims to be the home of the very first ice cream sundae!

Home to the Lake Renwick Heron Rookery and many landmarks and historic districts. Downtown Plainfield, the heart of the community, offers a wide variety of shopping, entertainment, dining, and seasonal events. Plainfield is the perfect place to live, or even spend the day!

ACTIVE INVENTORY

Y/Y CHANGE

160

-44.3%

NEW LISTINGS

Y/Y CHANGE

2,433

-1.9%

Average Market Time

Y/Y CHANGE

24

-58.6%

Properties Available December 2021

2021

Aurora Aurora, the “City of Lights”, has a rich history with 4 historic districts and holds the position as the 2nd largest city in Illinois.

The city is accessible through 5 interchanges on I-88, and the city’s corporate offices and commercial growth continue to expand the city’s boundaries.

Aurora also boasts two large shopping centers – Westfield Shoppingtown at Fox Valley and Chicago Premium Outlets, which attracts shoppers from near and far. Uniquely, Aurora falls within 4 counties – DuPage, Kane, Kendall, Will – and offers 6 school districts and 7 townships within Aurora city limits.

ACTIVE INVENTORY

Y/Y CHANGE

193

-40.6%

NEW LISTINGS

Y/Y CHANGE

3,316

-7.8%

Average Market Time

Y/Y CHANGE

25

-51.9%

Properties Available December 2021

2021

Lisle About 25 miles west of Chicago, Lisle is a wonderful place to live, work, or visit which has evolved into a thriving business-friendly community.

As the heart of the community, Lisle’s downtown recently underwent an award-winning renovation, transforming it into a gorgeous, walkable, retail and restaurant district. Lisle places great emphasis on sustainability with many of its businesses being members of the “Green by Choice” Sustainable Business Partnership – offering sustainable products and services, and committed to reducing waste.

With its location at the crossroads of I-355 and I-88, just 30 minutes from both O’Hare and Midway, Lisle provides commuters with plenty of options!

ACTIVE INVENTORY

Y/Y CHANGE

64

-40.2%

NEW LISTINGS

Y/Y CHANGE

779

-1.8%

Average Market Time

Y/Y CHANGE

41

-46.1%

Properties Available December 2021

2021

COMMERCIAL, INDUSTRIAL, & LAND

NEW CONSTRUCTION UPDATE

LOCAL MARKET

New home construction was a staple of the Chicagoland real estate market for decades prior to the great recession. As you will see in the chart, the level of new construction activity plummeted post-recession and still remains a fraction of what it was. The rapid real estate market of the past 18 months has created a golden opportunity for homebuilders and developers to jump in to fill the supply gap. While the appetite for investment in new developed homesite inventory exists in the Chicagoland market, homebuilders have been hamstrung by major supply chain issues, labor shortages, and material price increases that have kept them from ramping up capacity to meet the current demand.

2022 OUTLOOK 2022 is poised to be a strong year for developers and homebuilders. Many new home communities are coming to market and they are experiencing unprecedented interest from the pent up demand of homebuyers. While we will see an increase in permit activity in 2022, bringing developed homesites to market is a long process and the majority of the pipeline of new development will not hit the market for another 24 to 36 months.

"2022 is shaping up to be another strong year for new home activity, however, well located lots and land will be in short supply again this year."

-LANCE RAMELLA, HOUSINGTRENDS, LLC

COMMERCIAL REAL ESTATE UPDATE

BY SHAMUS CONNEELY

SVP, john greene Commercial The onset of the pandemic in early 2020 shook all asset classes under the commercial umbrella (industrial, multifamily, office, retail, senior housing, medical) to their core. Investors paused to see where their capital could be safe, and even prepared to pounce on distressed assets (didn’t happen). Developers cancelled or delayed projects. There was collective deep breath and brandishing of white knuckles. All of this seemed proper order because a global implosion was imminent?

Well. No. Late 2020 consisted of investors and developers wondering where the distressed opportunities were, and how to get their previously ambitious plans back into action. Into 2021 the questions became, “How do we handle inflation?”, “How will we build affordably or on schedule?”, “Why is this land/property so expensive?”, “Can we get the rents we need?”, and “How can I find more deal flow?”.

The 2021 rebound in commercial real estate was both swift and unexpected, but very real. While the impacts of Coivd-19 still linger in retail, office, hospitality, and senior asset classes (yet not quite as damaging as anticipated – thank you stimulus packages), one might argue that the impact in Industrial, Multifamily, and Housing Development was that of an accelerant rather than a deterrent. Call it a Covid push, the continued adoption of E-Commerce, the work-from-home lifestyle, or the Millennial mindset. Whatever “it” is, “it” has driven an enormous demand for more distribution and supply chain assets, as well as demand for people to live somewhere different.

Rent growth in 2021 for Industrial was 3.8%, and occupancy levels are at record highs, with no tail off in demand. Rent growth in 2021 for multifamily was 13.5%. This growth includes a new and exploding asset class; single family rental, with over $30 billion in new capital allocated in 2021 for future investment. We are also seeing occupancy levels at record highs. Home prices across the nation increased 19%, which in turn drove demand for new land to develop and agricultural land price increases of 18% over the course of the year.

COMMERICAL REAL ESTATE UPDATE 2022 OUTLOOK

As investors and developers dive into 2022, the appetite for investment remains strong, with a focus on how best to outpace inflationary pressures and how to best allocate VERY hungry capital. Industrial and Multifamily will remain darling asset classes. However, the more COVID constrained classes could provide strong upside if the “COVID cloud” dissipates this year. Experiential retail, restaurants, hotel/leisure, office, and senior assets that struggled in 2021 can provide great value to investors in the near term as the population emerges from their collective quarantine. The common sentiment is that in the face of inflationary pressures, even with a likely rise in interest rates, ownership of hard real estate assets will provide above average returns, and the capital used to do so will come at a low historical cost. So, despite valid political and inflationary concerns, the appetite for commercial real estate investment remains very aggressive and is only likely to increase in 2022. Or more simply...Giddy up!

ABOUT US

We are john greene Realtor, a family-owned and operated company founded in 1976 by John Greene. We are a local brokerage that brings the reach of an expansive global network of independent real estate companies to each and every one of its clients.

We believe in "A Better Way" that is based on personal relationships, hand-picked agents and local expertise. We focus on the quality of our agents over the quantity of our salesforce; proudly maintaining our 45-year reputation for excellence, innovation, and delivering a five-star client experience.

OUR COMMITTMENT

LIVE & LOVE LOCAL

More than a slogan, we are dedicated to supporting our communities through our work, our giving, and the promotion and patronage of local businesses.

CIRCLE OF FRIENDS

Circle of Friends is a program that was designed in 2015 as a contribution to and promotion of the shop local movement. Each month we partner with local businesses in the community to promote a special offer for the month with that business. The businesses we partner with and promote are hand-selected for their like-minded approach to enhancing the local communities we serve.

LIVE & LOVE LOCAL PODCAST We believe that connecting our clients with the community is one of our most important duties. It is with this founding principle in mind that we started the "live & love local" podcast with the simple mission of connecting you to the best stories Chicago's western suburbs have to tell. We interview the movers and shakers, the leaders, the entrepreneurs, and the business owners through the voices of our agents

jg CARES john greene Realtor prides itself on giving back to the communities we serve. We are committed to contributing our time, talent, and resources to build even better places to live. We live here, we work here, we raise our families here.

We passionately advocate for the places we call home, and our goal is to serve those in need to help our communities become stronger.

Learn more at johngreenerealtor.com/local

Naperville 1311 S. IL-59

Naperville, Illinois 60564

Naperville

220 South Main Street Naperville, Illinois 60540

Oswego

2677 Route 34 Oswego, Illinois 60543

info@johngreenerealtor.com

Hinsdale

22 West First Street Hinsdale, Illinois 60521