Market Conditions: November Home Sales Were the Strongest in 10 Years

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Sales were slow in October as Chicagoans obsessed about the Cubs but all that changed after the World Series and the election in November.

It was like a switch was flipped and buyers rushed out.

It was the second strongest November for sales in the last 10 years. Only 2009 was stronger but that was the year that the first time home buyers program expired at the end of November 2009.

The program caused a mass frenzy to run out and buy. You had to close by the end of November to get the deal.

If you remove that month, with its artificial stimulus, then this was the strongest November in the last decade.

From the Illinois Association of Realtors:

The city of Chicago saw a 13.2 percent year-over-year home sales increase in November 2016 with 1,881 sales, up from 1,661 in November 2015. The median price of a home in the city of Chicago in November 2016 was $260,000, up 11.3 percent compared to November 2015 when it was $233,500.

Here is the November sales data for the last 9 years (thanks to G for some of the data):

  • November 2007: 1859 sales and median price of $290,000
  • November 2008: 1093 sales and median price of $222,500 (16% short/REO sales)
  • November 2009: 1905 sales and median price of $215,000 (29% short/REO sales)
  • November 2010: 1144 sales and median price of $182,500 (39% short/REO sales)
  • November 2011: 1429 sales and median price of $157,000 (43% short/REO sales)
  • November 2012: 1750 sales and median price of $180,000
  • November 2013: 1844 sales and median price of $200,000
  • November 2014: 1638 sales and median price of $230,000
  • November 2015: 1661 sales and median price of $233,500
  • November 2016: 1881 sales and median price of $260,000

“The sharp uptick in both single family and condo home sales reflects consumers’ desire to enter the homeownership marketplace as opportunities present themselves, with the anticipated rise in rates and declining inventory boosting activity,” said Matt Silver, president of the Chicago Association of REALTORS® and partner at Urban Real Estate. “Buyers who’ve been watching from the sidelines and may have been distracted for a multitude of reasons, including the Cubs World Series run and the election, are being spurred into action, and both buyers and sellers are reaping the rewards.”

“With the election finally over, consumers appeared to have responded with a significant growth in sales (year-over-year),” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois. “Supply continues to be a problem, but prices of both regular and foreclosed properties increased and the forecasts suggest that these trends will continue into the first quarter of 2017.”

The average days on the market statewide fell to 62 days from 68 days a year ago.

The 30-year mortgage rate averaged 3.77% compared to 3.93% in November 2015.

The 30-year mortgage rates have now spiked to around 4.3% but those new rates won’t be reflected in the data for several months yet due to buyers being able to lock in their rates.

Earlier in the year, we debated whether or not low inventory was depressing home sales, i.e. that there just weren’t enough properties out there that buyers wanted to buy.

November’s huge spike in sales, while inventory remains as low as ever, proves that theory to be incorrect.

How long will this rush to buy continue?

Could this momentum propel the Chicago housing market to new all-time highs in 2017?

Illinois home sales, prices gain traction in November [Illinois Association of Realtors, Press Release, December 21, 2016]

19 Responses to “Market Conditions: November Home Sales Were the Strongest in 10 Years”

  1. We’re probably in for a plateau.

    But then Hillary was probably going to win, and Brexit probably wasn’t going to happen. It’s been a bad year for data-based predictions.

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  2. Interest rate increase is the driver for the uptick as Monthly payments are metric for home prices.

    Not seeing an significant uptick in wages to drive prices higher

    If I were looking to sell, I would start getting aggressive on pricing

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  3. 2009 was actually higher but the 1881 is a preliminary number so it will probably end up surpassing 2009 when it finalizes.

    As I pointed out in my update October had the lowest sales in 5 years but we ended October with a spike in pending home sales. They went under contract in October but didn’t close until November.

    Look at the moving average line in my first graph. We have already plateaued.

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  4. Forgot the link. http://www.chicagonow.com/getting-real/2016/12/chicago-real-estate-market-update-highest-november-sales-in-7-years/

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  5. Now is a great time to sell and move out of state.

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  6. We have been looking at lake houses in southern WI recently. And it is crazy how many homes actually went under contract in the last month. The realtor up there explained that often homes needing repair hit at this time of the year. Spring and summer buyers often want immediate gratification where winter buyers have time and desire to make changes.

    But we were up there yesterday and one of the homes, our third showing, got cancelled because it went under contract that morning. The home had been on the market for the entire year. I’s suspect the listing agent got the word out and the mention of our third showing likely took that other buyer off the fence. We were a bit bummed.

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  7. Not sure if the Wisco market is the same, but its a buyers market in NW Cheeseland for sub $750M and not brand new

    Availibility seems to be diven by old timers selling, younger couples that dont have the time to utilize the cabin with the demands of kids and foreclosures

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  8. “Availibility seems to be diven by old timers selling, younger couples that dont have the time to utilize the cabin with the demands of kids and foreclosures”

    Re: NW Wisconsin…..And according to Google maps, it’s a 6.5 hour drive to Hayward with about 10 traffic (!) incidents along the way. granted, winter is not the most popular time to go to your vacation home, but I imagine long weekends it’s worse.

    “I’s suspect the listing agent got the word out and the mention of our third showing likely took that other buyer off the fence. ”

    Realtors are a bunch of A-holes like that. real estate is a bit of a dirty business.

    And you should *never* buy anything, especially as eexpensive as a summer home, with a gun to your head.

    And S WI within a 2 hour drive of chicago will always be competitive and expensive.

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  9. HD,

    And you should *never* buy anything, especially as eexpensive as a summer home, with a gun to your head.
    And S WI within a 2 hour drive of chicago will always be competitive and expensive.

    Couldn’t agree more! No bidding wars on a second home. Just not gonna get into pressure sales.

    Front door to front door is an hour. Over the years we have been lucky enough to visit many friends cabins. Several are three plus hours and they are used infrequently at best. With the 1 hour commute we could actually stil head up on a Saturday after attending one of our kids AM soccer/baseball/football etc games.

    And I knew a family that spent Sunday nights up at thier lake all summer. They just got up early on Monday’s and headed home like a morning commuter. They said that Sunday’s on the lake were their favorite nights. Calmer quieter and really made it seem like a full weekend.

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  10. “We have been looking at lake houses in southern WI recently. And it is crazy how many homes actually went under contract in the last month.”

    The stock market keeps hitting record highs. That’s when luxury and vacation homes sell. The rich own stocks and they feel richer.

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  11. “2009 was actually higher but the 1881 is a preliminary number so it will probably end up surpassing 2009 when it finalizes.”

    2009 was “fake.” You can’t count it. Without that first time homebuyers incentive it would have sucked. Tons of sales were pulled forward to make that end of the month deadline to get the “free” money (and it WAS free.)

    So this year was the highest in 10 years. That’s amazing.

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  12. “Front door to front door is an hour. ”

    From where to where? An hour is just over the border.

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  13. Friends with a 2nd home is better than owning a second home.

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  14. I’m still searching for some friends with a nice boat in Chicago :( made a few with Lake Geneva homes though so I’ll live I guess

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  15. Friends with a 2nd home is better than owning a second home.

    Gary – soon true! We have many friends with lake homes and it sure is easier on the wallet!

    From where to where? An hour is just over the border.

    HD – Mostly looking in these areas. Wonder Lake, northern part of the chain of lakes, twin lakes, powers, silver etc. All are within 1:15 from our front door near O’Hare.

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  16. Wonder lake is actually pretty nice, did an AirBnb there for a weekend, nice get away for only being like 1:15 out of the city

    Homes on the lake are pretty cheap (200-400k) but the taxes are like 15k! a year eff that

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  17. Long family history on Wonder lake dating back to the late 20’s. Like the prices but dislike the water. They set up a dam in the 1920’s and flooded a valley to create that lake. Bottom is dirt so the water is never clear giving it the nickname Wonder muck.

    They recently dredged the lake bottom to get out the silt from nippersink creek. It was a big expense and long overdue but the residents voted for the cheaper option and did not do all they could have to solve the issues.

    The Housing stock just off the lakefront are mostly tiny cheap former summer homes. The buyers are often year round low infome families, especially in the homes on east side of the lake. ‘This has earned that area the nickname Wondertucky.

    While I could get over all that the taxes on the lake are indeed high. And with much of it unincorporated there are limited services. They even had a run in with bad water at one time. But because of the majority of lower income residents they generally refuse to vote to progress the area. A vote to be annexed into a nearby burb was lost for fear of higher taxes. That is its death of this area as they would put in water, sewers, and better roads leading to increased property values.

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  18. Does anyone know anything about Browns lake? I randomly stumbled into The Waterfront years ago and I liked the lake but being young, lake homes were not on my mind; but now that I’m older, I’m just wondering what’s up with that lake.

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  19. December came in at the lowest level in 4 years. Lots of month to month fluctuations in relative sales figures. Pending home sales rose again and inventory remains extremely low. http://www.chicagonow.com/getting-real/2017/01/chicago-real-estate-market-update-lowest-december-sales-in-4-years/

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