Laura Ellis pays close attention to the leading indicators that speak to her. And right now they say hang in there.

Baird & Warner’s chief strategy officer and president is always thinking about what’s next for the housing market, especially in an unpredictable economic cycle. And as a real estate veteran, she’s wary of trying to predict where things are headed, even as the spring market heats up.

“We just have to be humble about it and we have to deal with what we’re looking at now,” she said. “People on my team, my senior vice president, regional managers, are saying inventory is up, and I don’t think that means we’re spending more money until it translates into closed sales.”

Genuine item spoke with Ellis to get her thoughts on Chicago’s housing market, why it tends to be an outlier compared to other major markets and how she and her team think about a possible recession.

This interview has been edited and condensed for clarity.

TRD: What are you doing to get buyers to re-engage in this market?

LE: Now that we’re about a month or so into the spring market, we don’t really see a problem getting buyers to engage in the market, which I know sounds a little counterintuitive because prices have increased significantly and they’ve recently taken another little jump. However, what we find is that our problem is a lack of inventory.

When a listing comes on the market and it’s priced right, it sells very quickly with multiple offers. So it’s a very strange market, one that I haven’t experienced in my 30+ years in this case. Just when I think I’ve seen it all. Here we are with interest rates that have actually more than doubled in the past year and the buyers are still there. We’ve actually seen a big increase in pre-approvals coming through our mortgage company in the last few weeks – a dramatic increase, but again, the problem is that we don’t have enough properties to sell.

What contributes, I think, to the lack of inventory is that many people looking to move are afraid to put their house on the market before they find something because they are afraid their house will sell too quickly and they won’t. manages to find something.

TRD: I always try to put Chicago in context with what’s happening nationally. We reject many of the trends here, because we are not in New York, Miami or an emerging market. How do you see this Chicago versus some of the other mature markets across the country?

LE: All the predictions are that property is going to fall in value anywhere from 3 percent to 10 percent around the country. But our sale price is up this year. We never know what’s going to happen, but I don’t think we’re going to see price declines here in Chicago and the metro area, and that’s because we didn’t go up dramatically. Some of the other markets, they’re so cash heavy that no assessments were made to slow it down. You know, it’s competitive, people are paying hundreds and hundreds of thousands of dollars above list price to get properties. Well, it’s a little more moderated here.

I go to a lot of national conferences and with everything the last couple of years I sit around with people from Miami, Sarasota and Phoenix and feel like a loser. I’m like we’re up 4 percent and they’re like we’re up 18 percent. But you know, when times get tough, I’ll take that stability all day long.

TRD: I see @properties’ news that it’s going on a 1% brokerage fee, and monitoring first-quarter earnings reports for public brokerages, the broad story we’re seeing is a sense that some are bracing for impact. Are you worried that we are heading into a recession?

LE: I would describe our attitude as cautiously optimistic. We have never seen a market shift so quickly. If you go back to the Great Recession, it took about two years from the time we started to the bottom of our numbers. This change in the market happened so quickly to see that within a year is truly extraordinary. We monitor all our leading indicators. I’m not going to try to say it’s anything other than what it is. We are in the same boat as everyone else. All our costs went up. We try to pay bigger bills with less money.

So far shows the activity is up. It is very reflective of last year, actually slightly better than last year, where we are struggling is the listing stock.

We try to look at everything through a historical lens. If we do the business we did in 2023 and 2022, it’s still a very healthy level of business.