As a real estate broker, one of the core parts of your day-to-day responsibilities is helping buyers and sellers navigate the real estate market. In a city like Chicago, that can be more easily said than done.
As a city, Chicago is dynamic and ever-changing. No matter how much time you’ve spent here, there’s always something more to see and learn. As the writer Dominic Pacyga once put it: “there seems to be a different Chicago around every street corner, behind every bar, and within every apartment, two-flat, cottage, or bungalow.”
So, as a new-to-the-business broker, how can you learn more about all of the wonderful aspects that make our area unique — and develop the skills and understanding you need to provide a top-tier experience to your clients?
Block by Block, Property by Property: Chicago Consists of Many Types of Markets
When talking with someone about Chicago real estate, it’s very common to hear this phrase:
“How is the Chicago market doing?”
The answer is that it really depends on what your individual goals are as a buyer or seller. What are you looking to achieve, what specific strategies are you considering, and when are you planning to take action?
Chicago is made up of 77 official neighborhoods. Within the city, we have different marketplaces that can vary on a block by block basis. Meanwhile, we also have different markets when it comes to property types. From attached housing (such as condos or townhomes), to multi-unit buildings, to detached single-family homes, there are many different submarkets within Chicago that can be considered unique in and of themselves.
For instance, right now if you’re looking to sell in a high-rise-heavy market such as the Gold Coast or River North, then it is a very strong buyer’s market. If you’re looking to purchase a condo in Lincoln Square or Lakeview, then it is currently a seller’s market. All of this goes to show that you can see very significant differences within a fairly general location, such as the north side of Chicago.
As a broker, it is incredibly important that you take time to understand all of these different pieces, and how they may impact one another. There will always be different economic factors that impact one property type or one neighborhood; these factors can change quickly, and can have ripple effects for different buyers and sellers depending on their unique circumstances.
Understanding the Lifestyle: What Makes a Marketplace Unique?
Real estate is not just about numbers; it’s about people. To gain a better understanding of the marketplaces that make up Chicago, you also need to look at things through a lifestyle perspective.
As a real estate broker, you need to know what it’s like to actually live in a certain area. That could mean everything from knowing the best restaurants and nightlife, to scoping out the best grocery stores, to understanding how public transportation and parking regulations work in the neighborhood.
Especially for newer real estate brokers, my philosophy is always that you should try to get outside of your comfort zone and start spending more time in those areas that you know you want to be selling real estate. That could mean picking up dinner there on a weeknight or a weekend, instead of the typical place around your house that you might normally order from. It could mean going on a bike ride in a new neighborhood, or looking up bike trails for that location. But really, it means taking time to find out more about what it would be like to live in that market.
Negeen Masghati, our office’s Assistant Managing Broker, often speaks to the importance of putting yourself in the position of different buyers. As an example, what would someone with a dog need to know about living in a specific area? They’d want to be able to figure out things like where the local groomer is based, or where the closest dog park is.
As a broker, Negeen says, it’s important to “think outside of yourself and what your life is, figure out what other people need, and know that information.”
Digging Into the Data: Leverage Tools and Resources for Your Success
In addition to understanding what makes markets unique, real estate brokers need to know the data — and, more importantly, what the data is saying.
In our office, we talk a lot about understanding how to use data to tell a story, especially in terms of where market challenges or opportunities may be. This way, our agents can stay a little bit ahead of the curve, and share important information with their clients so that they can more accurately navigate the marketplace.
As an example, let’s use the neighborhoods we discussed a bit earlier. Let’s say that there is a couple looking to sell their detached property in Lincoln Square, in order to downsize. That type of property is in high demand right now, meaning that Lincoln Square is a seller’s market and these clients could sell at a premium. Meanwhile, there is a strong buyer’s market downtown in the Loop and River North, making it an attractive location for this couple to search as they transition into a two-bed, two-bath condo.
In situations like these, we make sure our brokers have the training and experience they need to use the data to really understand different market segments, in order to help guide their clients as they make decisions and look at opportunities. In this example, a real estate agent who has broken down the data can help explain that this is a perfect opportunity for a move-down seller to take advantage of the market on both sides — selling their current home for a steep premium, while buying their next property at a significant discount on the other end.
There are a few different ways for brokers to get a handle on all this data — including knowing core concepts, taking advantage of our office’s tools, and working closely with our management team to develop strategies and discuss tactics.
As a broker, one of the most important and frequently used metrics for understanding the market is months supply of inventory, or MSI. This is used to gauge how long it would take all of the inventory currently on the market to sell, given the rate at which things have been selling over the last 30 or 60 days. For example, if you have 10 properties that are on the market and they’re selling at a rate of one per month, then you’d have a 10-month supply of inventory.
Typically, we would say that a marketplace that is less than five months supply of inventory would be considered a seller’s market; five or six months supply of inventory is neutral; and anything that is above six months would be a buyer’s market.
To evaluate inventory and other important metrics, Baird & Warner agents have access to an unparalleled workshop of tools and resources designed to increase efficiency and drive production. Negeen, Sales Support Manager Diana Duvall, and I are all available to help introduce new brokers to all of the tools available — from the MLS and InfoSparks, to Baird & Warner’s exclusive in-house market reporting tools.
Finally, in the Lincoln Park office we make sure our brokers always have access to individual coaching and mentorship. Negeen, Diana, and I will always make sure to set aside time to sit down with brokers one-on-one, to help them evaluate a particular clients’ needs or examine a situation happening in a specific marketplace. Our office also regularly comes together to learn, share new ideas, and discuss the latest market developments. Whether we meet in-person or online, I use data in every sales meeting to educate our agents as to what’s going on from neighborhood to neighborhood around the city of Chicago.
Looking to Gain an Edge in the Market? It All Starts With Finding the Right Office.
Just behind your personal motivation and drive, finding the right office is one of the most important factors in determining your long-term success in real estate. Not all offices are the same, and it is extremely important that you do your homework on the front end. When I started out, I wanted a strong, ongoing training program; a culture that was high-energy and collaborative; and a brand with a reputation for integrity that brought me credibility in the market.
At Baird & Warner Lincoln Park, we invest in our new brokers from day one, providing a multidisciplinary training experience from talented teachers and trainers — both company-wide, and right here in our Lincoln Park office. We strive to create a collaborative environment where our brokers feel empowered to use the innovative tools and support we provide to build thriving, sustainable businesses. As a result, our Lincoln Park brokers have a city-wide reputation as some of the most knowledgeable, ethical, professional, and productive in the industry.
As Managing Broker of the Lincoln Park office, I take ownership in creating and maintaining an office culture that promotes continuous improvement, and a brand that I can be proud of — one that provides unparalleled levels of control, convenience, efficiency, and satisfaction for both our agents and their clients.
I always welcome the opportunity to discuss your real estate career. Whether you are considering a career change or looking for a new partner in your existing business, I look forward to connecting whenever you’re ready to start the discussion!