We already knew January was weak but the official Illinois Association of Realtors numbers are out today.
January sales fell 9.1% year over year but last year was the highest in 6 years.
“The city of Chicago saw a 9.1 percent year-over-year home sales decline in January 2014 with 1,383 sales, down from 1,521 in January 2013. The median price also rose to $200,750 versus $157,000 in January 2013, an impressive 27.9 percent annual increase.”
Sales data since 2006 (thanks to G):
- January 2006: 2009 sales and median price of $258,000
- January 2007: 1850 sales and median price of $279,900
- January 2008: 1203 sales and median price of $290,000
- January 2009: 918 sales and median price of $205,000
- January 2010: 1237 sales and median price of $195,000
- January 2011: 1034 sales and median price of $150,000
- January 2012: 1093 sales and median price of $149,000 (not sure why IAR has 1123 sales for last year)
- January 2013: 1521 sales and median price of $157,000
- January 2014: 1383 sales and median price of $200,750
“January’s activity is fairly typical for this time of year,” said Matt Farrell, president of the Chicago Association of REALTORS® and managing partner of Urban Real Estate. “A brutal winter doesn’t typically encourage home shopping fever in Chicago, and with inventory down 25 percent, the homes that did sell produced well above the median price by almost 28 percent to just over $200,000.”
“Investor opportunities and first-time homebuyers are still finding deals in a market that we might not see again for years to come,” Farrell added.
“Severe winter weather and seasonal trends definitely affected sales in January,” said Phil Chiles, ABR, CRS, GRI, SRES, president of the Illinois Association of REALTORS® and Broker-Associate with The Real Estate Group in Springfield. “Despite diminished traffic from buyers, prices remained robust and indications are that they will continue to show strength as we enter the spring selling season.”
A couple of things are interesting about this report:
1. The jump in the median price is a red herring. All it means is that the middle class buyer has taken himself out of the game. The rich are still purchasing those $1.5 million new construction homes in Southport so it’s pushing up the median.
2. How can it be the weather? If you closed in January, you went under contract in November or December. While December’s weather wasn’t great, it wasn’t awful either. There were no polar vortices in December.
Mortgage applications continue to be way below seasonal norms. Historically, March sees the largest spike in mortgage applications for the year. The next 5 weeks will tell us how the spring home buying season will be.
Inventory continues to be low. Will that change when spring finally gets here?
Severe winter weather cools January home sales but median prices continue year-over-year march upward [Illinois Association of Realtors, Press Release, February 21, 2014]