The sales numbers are out on the first quarter (Jan-March). From Crain’s:
In the city of Chicago, sales of homes and condos fell 19.9% in the quarter to 4,618. The median sale price, meanwhile, rose 5.4% to $295,000.
In the nine-county Chicagoland area, sales were down 29.9% and median price fell 0.6% to $243,500. The Illinois Association of Realtors blames it on the weather…and the economy:
“Extreme winter weather on top of shaky consumer confidence due to rising gas and food prices and the uncertain economy affected overall home sales activity statewide,” Kay Wirth, president of the Realtors group, said in a press release. “Realtors do anticipate a boost in activity as we enter the spring housing market from pent-up demand held over for so many months.”
Thirty year fixed mortgage rates were down compared to the first quarter 2007 at 5.91% versus 6.24% in 2007.
But if you want to rent instead, the Chicago Tribune reports that rents are rising and landlords are in control:
The vacancy rate in Chicago for the first quarter of the year was 4.7 percent, according to Hendricks & Partners, a Phoenix-based real estate management company.
“Anything below 5 percent is considered a landlord’s market,” said Walter Molony, a spokesman for the National Association of Realtors. He noted that the national vacancy rate also stood at 4.7 percent for the quarter.
In past years, a rate of 7 percent was not considered abnormal.
“Renters are hesitating to get into the homeownership market,” Molony said. “They are staying in rentals.”
Because of the demand for rentals, rents are on the rise:
Chicago-area rents went down between 2001 and 2003, according to CBRE Torto Wheaton Research.
In 2001, the average rent was $1,035 a month, according to Torto Wheaton. By 2003, the average rent had fallen to $980 a month. The average derives from all apartments in buildings with five or more units located in the greater Chicago area.
By the end of 2007, the average rental cost had rebounded to $1,079.
But some analysts do not expect rents to spike as housing prices did in recent years.
“Generally, a slowing economy is hurting” rentals, said John Coumarianos, an equity analyst with Morningstar.
We’ve been chattering about the thousands of units coming on-line in the downtown area in the next two years. Can students really rent all of those one bedrooms with granite and stainless steel appliances? And what about the $2500-$3000 two bedrooms?
The rental activity in buildings like Library Tower – which is right across from the multi-college dorm at State and Congress Parkway- will be a good indicator of what the market will bare.
Matthew Lawton, senior managing director of Holliday, Fenoglio Fowler, sees about 7,000 new rental units coming on the market in the next three years, well over the 4,500 that is typical.
And they won’t fall under the category of low-income housing, he said.
“It’s all going to be at the top of the market,” Lawton said.