If there’s any indication that the local real estate economy has climbed out of the hole it fell into in 2008, it might be that homeowners have again started investing — in many cases heavily — in their properties.
In Brookfield in particular, officials have noted a spike in residential building permit activity during the first quarter of 2016. While the village began to see an increase in significant home renovation by developers such as Arnold Wesley LLC and BrightLeaf Homes a couple of years ago, individual homeowners also have begun to sink money into properties.
According to Nicholas Greifer, community and economic development director for the village of Brookfield, the total value of improvements that property owners applied to make from January through April 8, 2016 has jumped 78 percent from the same period in 2015.
During that same period in 2015, according to information provided by the village’s building department, the total permit valuation was about $1.7 million. This year during that same period, permit valuation was more than $3 million.
In terms of revenue, the village has collected building permit fees in the amount of $43,262 during the first quarter of 2016, said Finance Director Doug Cooper. From 2013 to 2015, Cooper said, the village collected roughly $31,000 to $32,000 in building permit fees during the first quarter of those years.
The total number of permits is up 21 percent year over year, and the permits are more substantial compared to 2015. During the first quarter of 2015, there was just one residential building permit valued at more than $100,000. And the lone second-story addition during the first quarter of 2015 was valued at just $35,000.
In 2016 through April 8, there were seven residential building permits valued at more than $100,000 (four of them valued at $150,000 or more). Five of those seven permits were for second-story additions.
“Just structurally overall, the business environment is pretty good and people are confident they’ll get a return on their investment,” said Greifer.
But the experience of seeing developers like Arnold Wesley and BrightLeaf rehab sell homes at prices not seen often in Brookfield even prior to the 2008 crash has also had an effect, Greifer surmised.
“One big part is that there are a lot of smaller home builders and individual property owners initiating the kinds of improvements that Arnold Wesley and BrightLeaf have done,” Greifer said.
Arnold Wesley, a more traditional home improvement company, and BrightLeaf, which focuses on green-centric development, entered the Brookfield market at roughly the same time in 2013-14.
The companies bought distressed properties and bargain prices and turned them around at prices far above the median sale. Between May 2014 and October 2015, Arnold Wesley LLC sold 11 renovated homes in Brookfield for an average price of about $436,000.
BrightLeaf Homes, meanwhile, sold a handful of homes between $387,000 and $390,000 during that period. According to the Midwest Real Estate Data (formerly known as the Multiple Listing Service of Northern Illinois), the median sale price for a single-family home in Brookfield in 2015 was $229,900.
The village also got a boost early in January when Chicago Real Estate Daily, which is published by Crain’s, listed Brookfield as the second-hottest real estate market in suburban Chicago in 2015.
“People are seeing that this is a viable location for first-time homebuyers,” said Village Manager Keith Sbiral. “We’re seeing that uptick because the price is right and we have the available housing stock to do the kinds of conversions that are being done.
“I think you’re going to see substantial resident investment over the next couple of years.”
Riverside, North Riverside activity up
The uptick in building permit activity isn’t just a Brookfield phenomenon. The number of building permits and the total value of those permits are also up in Riverside.
According to Sonya Abt, the village’s community development director, Riverside’s building department issued 148 permits during the first quarter of 2016 versus 83 in 2015.
The total value of those permits in 2016 was a little more than $2 million, compared to $1.4 million in 2015 — an increase in value of 46 percent.
“It’s been fairly evenly split between different things — additions, remodels, windows and doors and HVAC systems,” Abt said. “We’re just starting to get into driveways and patios.”
And the first quarter numbers don’t include two new single-family homes that will be constructed in 2016 on Blackhawk Road, replacing one single-family home on a double lot.
“We’re just getting into permitting season,” Abt said.
Permits were also up in the first quarter of 2016 compared to 2015 in North Riverside.
According to Karyn Byrne, the village of North Riverside’s code enforcement officer, 162 permits had been pulled through the first quarter of April 2016; in 2015, there were 127 permits.
There was a particular jump in garage roof replacements (28 in 2016 compared to 12 in 2015), but that was in response to a village code enforcement blitz targeting garage roofs, Byrne said.
Byrne added that the village had also scheduled 33 home resale inspections in the first quarter of 2016 compared to just 19 in 2015, which could signal more residential building activity as the year moves ahead.
In terms of total building permit revenue, North Riverside is projecting about $295,000 for fiscal year 2015-16, which ends April 30. That pales in comparison to the $558,000 collected in fiscal year 2013-14 and the $407,000 collected in 2015-16. But those revenues were driven by large-scale commercial development in those years, including Costco and its adjacent outlots as well as the new Chick-fil-A store at the corner of Harlem Avenue and Cermak Road.