Chicago Market Conditions: March Sales Decrease 3.4% as Tight Inventory Squeezes Buyers

Lincoln Park spring flowers April 2012

The March sales numbers are out. While the market remains hot, inventory is still tight. Many are blaming the tight inventory on the year over year decline in sales.

From the Illinois Association of Realtors:

The city of Chicago saw a 3.4 percent year-over-year home sales decrease in March 2016 with 2,099 sales, down from 2,173 in March 2015. The median price of a home in the city of Chicago in March 2016 was $268,500, up 3.3 percent compared to March 2015 when it was $260,000.

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 1,875 $235,000
2015 2,173 $260,000
2016 2.099 $268,500

“Consumers this spring will be challenged to find just the right property from a diminished pool of homes to choose from,” said Illinois REALTORS® President Mike Drews, GRI, broker-associate with Charles B. Doss Co. in Aurora. “Based on increasing median prices and average days on market, it’s clear if they do find the home of their dreams they are going to have to move quickly and be prepared in some instances to pay more in the face of heightened competition.”

The time it took to sell a home in March averaged 77 days, down from 85 days a year ago. Available housing inventory totaled 58,613 homes for sale, a 12.3 percent decline from March 2015 when there were 66,852 homes on the market.

Average 30-year mortgage rates were similar to a year ago at 3.70% down from just 3.76% in March 2015.

Inventories remain near record lows in some parts of the City of Chicago and for certain product, i.e. single family homes in certain neighborhoods or 3-bedrooms in others.

“Intense buyer interest during the first months of the year further reduced the already low number of properties which were on the market,” said Dan Wagner, president of the Chicago Association of REALTORS® and senior vice president for government relations at the Oakbrook-based Inland Real Estate Group of Companies, Inc. “With more properties coming on the market as consumers embrace the spring selling season, we should see inventories better able to meet significant buyer demand. Homes are selling faster than they were last year, so consumers need to act quickly if they are interested in buying.”

Will low inventories strangle this booming market?

Or will sellers finally start to list later this spring as prices hit new highs in many neighborhoods?

Illinois home prices climb 4.3 percent in March; sales increase 1.9 percent [Illinois Association of Realtors, Press Release, April 20, 2016]

11 Responses to “Chicago Market Conditions: March Sales Decrease 3.4% as Tight Inventory Squeezes Buyers”

  1. “consumers need to act quickly if they are interested in buying.”

    When have I heard this before?…

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  2. Stop typing and buy!

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    Rating: +9 (from 9 votes)
  3. BUY NOW BEFORE THE WEATHER GETS BETTER!!!!

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    Rating: +7 (from 7 votes)
  4. BUY HIGH. SELL LOW!

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    Rating: +5 (from 5 votes)
  5. Wanda is really going to skew the number whenever they do their mass closings. MLS shows they’ve got at least 3 of their 10M units contingent/pending + another ~100 of the 1-3M regular units.

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  6. I think I’ve missed the last train departing from the station… I’ll never be able to afford a home again :(

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  7. “I think I’ve missed the last train departing from the station… I’ll never be able to afford a home again.”

    Sure- just look outside the GreenZone.

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  8. “Wanda is really going to skew the number whenever they do their mass closings. MLS shows they’ve got at least 3 of their 10M units contingent/pending + another ~100 of the 1-3M regular units.”

    Nothing closes in new construction until the building is built and the city gives final engineering approval for the units to be occupied. So this won’t “skew” the numbers until 2020. And you’re assuming all of the 100 units are actually going to close. That all those Chinese “investors” will actually put the money down in 4 or 5 years after their economy has been in a recession (and the US too.)

    I like this building and I hope it gets built and doesn’t end up another hole in the ground like the Spire. They always wait until really late in the cycle to build these.

    The new Helmet Jahn tower on South Michigan Avenue will have another 300+ condos probably starting at over $1 million each. Who’s going to buy those?

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  9. Just posted my monthly update: http://www.chicagonow.com/getting-real/2016/05/chicago-real-estate-market-update-home-sales-jump-to-9-year-high/

    Very interesting. April sales hit a 9 year high with a 10.1% increase over last year, though IAR will report it as a 7.9% increase. Inventory remains incredibly low.

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  10. Gary, thank you very much for the updated stats. Did you have data for median and mean home sale price by home and attached unit sales?

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  11. Yeah, I purposely never post that because people invariably conclude (incorrectly) that it represents what’s going on with prices. However, I will tell you that mean and median didn’t really change much for attached while the mean was up 10% on detached and the median was up almost 25%.

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