As expected, March sales fell 6.5% year over year as weather, tight inventory, higher prices and higher mortgage rates bit buyers.
From the Illinois Association of Realtors:
“The city of Chicago saw a 6.5 percent year-over-year home sales decline in March 2014 with 1,819 sales, down from 1,945 in March 2013. The median price rose to $237,000 versus $187,000 in March 2013, an annual increase of 26.7 percent.”
Historic data courtesy of G:
City of Chicago condo/TH/SFH closed totals March
year/closed/median/% REO-Short Sales
Year Closed Median %REO/SS
1997 1,226 $126,875
1998 1,540 $137,003
1999 1,766 $152,125
2000 1,793 $167,500
2001 1,800 $195,000
2002 2,112 $210,000
2003 2,261 $225,000
2004 2,772 $244,950
2005 2,822 $271,125
2006 3,000 $275,862
2007 2,399 $285,000
2008 2,098 $300,000
2009 1,219 $217,000 37%
2010 1,860 $207,750 38%
2011 1,481 $163,763 49%
2012 1,630 $170,500 44%
2013 1,894 $187,500
2014 1,819 $237,000
“Relative to the number of homes available for sale in the marketplace, Chicago is still selling more homes than it did this time last year,” said Matt Farrell, president of the Chicago Association of REALTORS® and managing partner of Urban Real Estate.
“Most of the transactions which closed in March are homes that went under contract in January and February, despite the inclement winter which definitely impacted an already anticipated slower winter market,” Farrell added. “Buyer demand continues to outpace available inventory; Sellers looking to make a move should be jumping off the fence now while buyers are still able to capitalize on attractive interest rates.”
Did he just say “buy now or be priced out forever”?
Farrell is correct that March sales would have gone under contract during the worst of the winter. But mortgage applications have been at 18-year lows for weeks which indicates that future sales will also be slower than a year ago.
Soon, no one will be able to blame “the weather.”
The rising median home price is also interesting. Remember, the median just tells you what mix is selling. It doesn’t tell you that prices are actually rising.
With mortgage rates about a percent higher than a year ago, and home prices also higher, there are less sales on the lower end of the market which is most impacted by an increase in the monthly mortgage payment.
Is Farrell right that you should buy now or you won’t be able to afford to buy later when mortgage rates are higher?
And what about sellers? Isn’t the window going to close for sellers as well?
Illinois median home prices increase in March; Number of home on market improves, but inventories remain tight [Illinois Association of Realtors, Press Release, April 22, 2014]