Sales have been slowing year over year the last several months so it’s no surprise that we saw more of the same in May.
From the Illinois Association of Realtors:
“The city of Chicago saw a 15.7 percent year-over-year home sales decline in May 2014 with 2,390 sales, down from 2,834 in May 2013. The median price rose to $270,000 versus $235,000 in May 2013, an annual increase of 14.9 percent.”
Last May was also the best May since the boom years as interest rates remained low. Remember, rates didn’t jump until mid-May and it took several months for those rates to impact buyers because those buying in May, June and even July most likely already had locked in the low rates.
- May 2008: 2119 sales
- May 2009: 1557 sales
- May 2010: 2057 sales
- May 2011: 1705 sales
- May 2012: 2037 sales (not sure why the IAR has a higher number for 2012)
- May 2013: 2834 sales
- May 2014: 2390 sales
Median price data:
- May 2008: $319,500
- May 2009: $225,000
- May 2010: $230,000
- May 2011: $190,000
- May 2012: $203,000
- May 2013: $234,000
- May 2014: $270,000
“Median home prices continue to rise as buyers in the spring market seek out their new home from the little inventory on the market, and make their best and strongest offer,” said Matt Farrell, president of the Chicago Association of REALTORS® and managing partner of Urban Real Estate.
“It truly is an ideal time for prospective sellers to evaluate if now is their right time to buy, and if so, to consider making their move. Buyers are being realistic about finding the home they might move into and upgrade later, and don’t expect to find their dream home immediately. They are looking for location, space, and the potential a property ultimately has,” Farrell added.
“The housing market continues to provide evidence of a return to more normal conditions,” noted Geoffrey J.D. Hewings, Director of the Regional Economics Applications Laboratory of the University of Illinois. “Sales continue to increase on a month-to-month basis although they have been unable to match the stellar gains of last year. The impact of foreclosures continues to decrease with the expectation that the numbers of foreclosed properties on the market will return to pre-recession levels sometime in the next 6-12 months. Homeownership rates for retiring Baby Boomers continue to increase providing some potential medium-term housing market growth opportunities.”
Even though rates are not historically high, home sales continue to lag both in Chicago and nationally. Chairman Yellen blamed tight credit in the FOMC press conference this month.
But it seems like credit is no harder to get than it was last May when sales were soaring.
Will sales lag in Chicago for the rest of the year?
Illinois median home prices up 8.3 percent from a year ago; Statewide home sales down 9.4 percent in May [Illinois Association of Realtors, Press Release, June 23, 2014]