Market Conditions: Chicago May Home Sales Fall 17.1% Compared to 2010

The May 2011 Chicago sales data is out from the Illinois Association of Realtors.

It’s not surprising that we saw yet another year over year sales decline as 2010 was juiced by the home buyer tax incentive.

In the city of Chicago, May home sales (single family and condominiums) totaled 1,705, up 16.5 percent from 1,464 sales in the previous month and down 17.1 percent from 2,057 homes sold in May 2010.

The city of Chicago year-over-year median price for single family and condominiums in May 2011 was $238,450 up 3.7 percent compared to $230,000 in May 2010; it was 16.0 percent higher compared to the previous month of April 2011 when it was $205,500. For condominiums specifically, the median price reached $299,000 in May 2011, up 10.3 percent year-over-year from $271,150 in May 2010.

Sales data from the last four years:

  • May 2011: 1705 sales
  • May 2010: 2057 sales
  • May 2009: 1557 sales
  • May 2008: 2119 sales

Median price data over the last four years:

  • May 2011: $238,450
  • May 2010: $230,000
  • May 2009: $225,000
  • May 2008: $319,500

Once again, the IAR chose to break out condo median sales price separately from single family home data.

  • May 2011: $299,000
  • May 2010: $271,150

“Chicago’s condo sales in May outpaced single family homes by nearly 30 percent, a strong indicator that the condo market is re-emerging as a viable and affordable housing choice.  We continue to monitor the impact of condo financing options and distressed condo units and how they will shape sales in the remainder of 2011,” said Mabel Guzman, president of the Chicago Association of REALTORS® and a REALTOR® with Envision Real Estate LLC, Chicago. “Sellers this summer have the opportunity to position their home with a compelling sales price, and leverage low interest rates on the purchase of their next home.”

“According to our forecast, annual sales rates will turn positive for both Illinois and the Chicago region in July and August, a 22-25 percent increase statewide and 25 to 36 percent for Chicago,” estimates Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “This means the effect of the homebuyer tax credit will finally fade out in Illinois during the summer. Median prices for June, July and August are expected to be higher than May in both Illinois and the Chicago region.

May Marks a Four-Month Rise in Illinois Home Sales [Illinois Association of Realtors, Press Release, June 21, 2011]

55 Responses to “Market Conditions: Chicago May Home Sales Fall 17.1% Compared to 2010”

  1. That headline is embarrassing. Sales always go up this time of the year. It’s called seasonality.

    As I’ve pointed out before the real concern is that contract activity is not increasing like it normally does at this time of year: http://www.chicagonow.com/blogs/chicago-real-estate-getting-real/2011/06/is-chicagos-2011-real-estate-market-turning-into-another-dud.html

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  2. “For condominiums specifically, the median price reached $299,000 in May 2011, up 10.3 percent year-over-year from $271,150 in May 2010.”

    IF the data is right this could signify a big improvement.

    However G on here pointed out some discrepancies with the IAR’s data or calculations. So I am very suspicious using their numbers as a source if they aren’t audited by an external third party.

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  3. Bob,

    We’ve discussed this median price data before. It’s totally meaningless. All it means is that people are buying better condos than they did last year. It does NOT reflect price movement, which is still negative.

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  4. “All it means is that people are buying better condos than they did last year. It does NOT reflect price movement, which is still negative.”

    Well perhaps on the plus side it does show some increased activity by people searching in the higher priced condo market. Is that a sign that people with money are gaining confidence in the market? We do know that the uber high market has shown a spark or two. I recall reading here that Jaime Daimons home and a few very high priced penthouses went under contract since the new year.

    It will take confidence in the market to get prices moving forward again.

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  5. So where is case schiller then?

    Overall, this report looks very bad for the market as a whole, but I’m sure certain sub-markets are doing well, and there will always be suckers paying 2008 prices in 2011.

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  6. Exactly Gary. BTW, we recently checked out Aqua and i wanted to report on it:

    – amenities rock now, but i wonder how crowded the place will become once the hotel opens up. Miumiu would kill for those nice lap pools as supposed to pathetic ponds most buildings have.

    – view are nice in some over 800K units, but many of the 700Kish ones will lose the quality of the views once the planned developments around aqua begin.

    – in terms of kitchen appliance and views, I’d take Legacy over aqua any day. They need a serious 15-20% price discount to compete with Legacy IMHO and the views in Legacy are much better and safer

    – still for given the current prices and assessments, I’d take MPO east over these two buildings any day.

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  7. from those stats it looks like median prices are going UP UP AND AWAY!!!!

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  8. Now Deux Deux has been condo hunting as well to Cartier an TJMAXX. He has almost seen it all before he is a month old!

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  9. “Well perhaps on the plus side it does show some increased activity by people searching in the higher priced condo market. Is that a sign that people with money are gaining confidence in the market?”

    The contract numbers do not show confidence.

    “So where is case schiller then? ”

    Case Shiller prices have been falling ~2% per month.

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  10. “We’ve discussed this median price data before. It’s totally meaningless. All it means is that people are buying better condos than they did last year. It does NOT reflect price movement, which is still negative.”

    I agree about the lack of usefulness of the median. However, the actual median for Chicago in May was $190,000. My pointing this out does not mean it is useful, just inaccurate based on the actual MLS sales. Gary, why don’t you check the median for yourself?

    Chicago May MLS closed and median:
    2008 2,174 $319,243
    2009 1,579 $225,000
    2010 2,111 $230,000
    2011 1,702 $190,000

    Condos only
    2010 1,291 $270,000
    2011 1,020 $249,762

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  11. The value of “statistics”

    http://www.nationalreview.com/articles/214729/housing-bears-are-wrong-again/larry-kudlow

    It’s amazing how people can make (or make up) stats to support their argument, even in the face of lots of evidence to the contrary. Kudlow has all sorts of stats to support his argument. Except his argument was 100% wrong.

    Give me one set of stats, and I can write you two articles. One saying how bullish they are, one saying how bearish they are.

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  12. G – Do you know what the IAR is doing to generate their numbers? Are they excluding foreclosures?

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  13. Miu I hope Cartier was for your push present!

    Now have you been a good European and applied for all his passports yet?

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  14. “Give me one set of stats, and I can write you two articles. One saying how bullish they are, one saying how bearish they are.”

    But it appears from G’s post the IAR is making up their own set of stats in an attempt to spread misinformation and mislead people that the market is doing better than it actually is.

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  15. It is one thing to spin an article off a given set of data. It’s another thing to misrepresent the data-set altogether. In school that sort of thing is grounds for severe academic discipline up to and including expulsion. The IAR has no such scruples it appears.

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  16. Nat, they don’t appear to be excluding foreclosures/short sales since their reported sales volumes are always very similar to mine from the mls (the same source they claim.) I have calculated the median excluding F/SS and that is not what they are reporting, either (May 2011 was $280,000.) Whatever they changed in their median reporting, it started back in Nov 2010.

    Here’s the monthly median comparison between IAR and my mls numbers:

    Jul 2010 IAR $196,500 G $196,500
    Aug 2010 IAR $200,000 G $200,000
    Sep 2010 IAR $180,000 G $180,000
    Oct 2010 IAR $183,000 G $183,000
    Nov 2010 IAR $206,000 G $180,000
    Dec 2010 IAR $199,250 G $167,250
    Jan 2011 IAR $170,000 G $149,500
    Feb 2011 IAR $177,500 G $150,000
    Mar 2011 IAR $191,000 G $163,400
    Apr 2011 IAR $205,500 G $169,000
    May 2011 IAR $238,450 G $190,000

    The rise in median from April to May is clearly due to the mix. Foreclosures and short sales decreased from 46% to 38% of closings. This is to be expected since investors make up the bulk of distressed prop purchasers and they do not exhibit the same seasonal patterns as owner-occupant purchasers.

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  17. “It is one thing to spin an article off a given set of data. It’s another thing to misrepresent the data-set altogether. In school that sort of thing is grounds for severe academic discipline up to and including expulsion. The IAR has no such scruples it appears.”

    You should file a complaint with their disciplinary board ala Orange County realtards v Irvine Housing Blog.

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  18. I’ll throw a log on the fire. Cook County $108 Bil funding gap.

    http://www.chicagobusiness.com/section/blogs?blogID=greg-hinz&plckController=Blog&plckBlogPage=BlogViewPost&uid=1daca073-2eab-468e-9f19-ec177090a35c&plckPostId=Blog:1daca073-2eab-468e-9f19-ec177090a35cPost:73061b12-c71d-45b0-aad9-130e57727e64&plckScript=blogScript&plckElementId=blogDest

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  19. miumiu,

    My wife and I also visited Aqua over the weekend. Did you see the SE Penthouse corner unit? Breathtaking! Of course so was the price and it is just a 2/2.

    We would love to get a unit there under $500/sqft.

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  20. good thing we don’t owe that all at once…

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  21. “But it appears from G’s post the IAR is making up their own set of stats in an attempt to spread misinformation and mislead people that the market is doing better than it actually is.”

    Yes, and that is why I said “It’s amazing how people can make (or make up) stats”. I never believe any “stats” that I read. They are supposed to be mathematical facts, but they rarely are…

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  22. On the run here so one quick post. My own unit sales numbers that I publish early in the month are usually within 10 – 40 units of IAR’s so I don’t think there is any funny business going on.

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  23. “I’ll throw a log on the fire. Cook County $108 Bil funding gap.”

    Following thru to Pappas’s reports, CPS supposedly had unfunded pension liability of ~$4.1B in 2009, but *total* pension liability of about $1.9B in 2010.

    So, is that a result of changes to pension benefits for new hires, or just a (inexcusable) mistake?

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  24. “My own unit sales numbers that I publish early in the month are usually within 10 – 40 units of IAR’s so I don’t think there is any funny business going on.”

    Yes, the IAR does appear to report the correct unit sales volumes, as I’ve said all along. It is their median calculation that is inaccurate based on the mls sales. Calculate the median for yourself, Gary, and you can confirm where the funny business is happening.

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  25. “Gary, why don’t you check the median for yourself?”

    G, my numbers are very close to yours – not the IAR’s.

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  26. “So, is that a result of changes to pension benefits for new hires, or just a (inexcusable) mistake?”

    I’m sure CPS is long CDS on Greek debt

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  27. “I’m sure CPS is long CDS on Greek debt”

    Maybe so, but I still don’t get how total liability is *less* than unfunded liability. Unless they somehow cut total liability by 50%+ in one year.

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  28. Could the IAR be so brazen as to push totals for units including short sales/foreclosures then exclude for median info?

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  29. “Could the IAR be so brazen as to push totals for units including short sales/foreclosures then exclude for median info?”

    As G noted, it’s not that obvious, as that would result in an even higher median.

    G–any chance they’re excluding only REO, or something like that?

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  30. he’s looked it; it seems they exclude random sales they don’t like

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  31. Nothing that I can find.

    Apr 2011
    $205,500 IAR
    $169,000 G
    $290,000 G exclude court/REO/short sales
    $255,000 G exclude REO only

    May 2011
    $238,450 IAR
    $190,000 G
    $280,000 G exclude court/REO/short sales
    $254,000 G exclude REO only

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  32. This is just another part of their game they are playing with potential home buyers. They lie about their statistics, in order to coerce people into buying, and possibly even paying more than they should, because they think “prices are going up”. Didn’t they think someone would find out? It’s not that hard to run the data, as G proved.

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  33. “It’s amazing how people can make (or make up) stats to support their argument, even in the face of lots of evidence to the contrary. Kudlow has all sorts of stats to support his argument. Except his argument was 100% wrong.”

    Larry Kudlow is a smirking, over confident buffoon. The picture accompanying that article captures his attitude perfectly. That he is wrong on this is unsurprising…he’s always wrong.

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  34. Hi Jennifer, yes Cartier was for me. But man everything is so expensive. My parents want to buy me a gift but I feel bad as the prices are crazy and I have most of the cheap stuff already for the same reason…lol
    As for passport, daddy Deux Deux will be taking care of it soon. I thought we will just add him to our passports, right? He will need a separate US passport too I assume.

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  35. “it seems they exclude random sales they don’t like”

    Not from the sales volume totals, though. It does appear that some have been excluded from the calculation of the reported median for 6 consecutive months. It is interesting that I have to remove 288 lower priced sales from my 1,707 total May mls sales in order to move the median from my calculated $190,000 to the IAR’s reported median of $238,450. The omission of 288 sales has no obvious significance in relation to totals of REO or other distressed sales.

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  36. @ Steven, we saw some SE corners but not the penthouse. I actually liked the NW corner a lot which had a panoramic view with lake and a lot of the city. Steven, have you been to Legacy, Heritage or MPE? I feel their views are safer.

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  37. IAR cooking the books. what a surprise!…lol or not : )

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  38. I don’t think you can add kids to your passport anymore. Check with your embassy. I just got a US one for now. Will get the other one later I suppose.

    Enjoy the Cartier!

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  39. Interesting. Where did you get the photo for the us one? will walgreens or cvs photo work for the? also deux deux cannot hold hid head up so not sure how we can photograph him.

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  40. “Maybe so, but I still don’t get how total liability is *less* than unfunded liability. Unless they somehow cut total liability by 50%+ in one year”

    oh snaps, somebody is Juking the Stats!

    (sorry havent used the phrase in a few months needed to let it out)

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  41. “Where did you get the photo for the us one? will walgreens or cvs photo work for the?”

    Yep.

    And, bring the car seat bucket, and a light, neutral blanket/pillowcase/whatever for behind his head, for proper photo contrast.

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  42. Anon, you are like wikipedia. Anything you don’t know?

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  43. Also note that in the photo your kids eyes have to actually be open in the photo. Quite the challenge on a newborn.

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  44. “Anon, you are like wikipedia. Anything you don’t know?”

    Too much to list. But so many of the questions here are about things I’ve actually had to do.

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  45. ““Anon, you are like wikipedia. Anything you don’t know?””

    didnt you know anon(ufo) is not a person, he is the omnipresence that google was modeled after.

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  46. “didnt you know anon(ufo) is not a person, he is the omnipresence that google was modeled after.”

    The MultiVAX.

    Anon how can entropy be reversed?

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  47. formerroscoevillager on June 21st, 2011 at 2:32 pm

    iphone shot. have lots of patience…

    “Also note that in the photo your kids eyes have to actually be open in the photo. Quite the challenge on a newborn.”

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  48. That is why I am taking him on my boat. So I won’t miss the internet : )

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  49. The quoted median price of $299K is psychotic. According to MRED, the median sales price for ALL Chicago condos went DOWN 16% from May 2010 to May 2011 by 16% from $160K to $134K. Same thing for average sales price for ALL Chicago condos as it went down from May 2010 to May 2011 from$ $239 to $219. These numbers are nearly identical to the condo price numbers for Chicago as reported by the world wide respected Case Shiller index. I challenge anyone on this board to dispute these numbers.

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  50. gringozecarioca on July 12th, 2011 at 4:33 am

    not that i have either old money or class. But i would assume one that has would humbly apologize. Let’s now play wait and see.

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  51. Here’s the data for June sfh/condo/th for the City of Chicago:

    Sales Volume (YR/June/2Q/1H)

    1997 1,817 5,163 8,289
    1998 2,214 6,193 9,793
    1999 2,435 6,620 10,799
    2000 2,513 7,258 11,698
    2001 2,451 6,967 11,291
    2002 2,590 7,993 13,412
    2003 2,891 8,340 14,006
    2004 3,752 10,176 16,579
    2005 3,850 10,809 18,116
    2006 3,557 10,120 17,042
    2007 3,127 8,986 14,938
    2008 2,286 6,391 10,997
    2009 2,082 5,090 8,097
    2010 2,634 6,785 11,141
    2011 1,877 5,076 8,666

    Median Price
    2007 $300,550
    2008 $309,945
    2009 $237,700
    2010 $230,000
    2011 $207,000

    June condo/th only for the City of Chicago:
    (YR/June volume/June median)

    2007 2,347 $307,500
    2008 1,665 $332,500
    2009 1,302 $291,000
    2010 1,616 $275,000
    2011 1,116 $250,000

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  52. Folks: About to pull the trigger on a 2/2 NE corner condo at Aqua. $/sq ft. = 500. The unit is on the lower end of the condo levels, but then again being 50 stories up makes for lots of blue water (river and lake) for now, and a decent chunk even 5 years out.

    Wanted to see what my fellow Crib Critters feel about this, especially based on falling June 2011 median, YoY, etc.

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  53. Put the gun to your head instead.

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  54. I just took a stroll through lakeshore east, what a godawful “neighborhood” its 10x more of a ghost town than the south loop now and there are literally zero commercial businesses at street level, just a ton of monolithic fugly highrises with “for sale” signs on them and nobody around… ANYWHERE! And god help you if you actually have to get from the east side and go north by foot…

    also that park in the middle of all those empty highrises is terrible, there’s no breeze from the lake because its like it was built in a subterranean dungeon

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