Market Conditions: April Sales Fall 5.3% in Chicago From 2021’s Blistering Pace
The Illinois Association of Realtors is out with the April data and the market remains strong despite rising rates.
In Chicago, home sales (single-family and condominiums) in April 2022 totaled 3,181 homes sold, down 5.3 percent from April 2021 sales of 3,360 homes.
The median price of a home in the city of Chicago in April 2022 was $370,000, a 1.0 percent decrease from April 2021, when it was $373,750.
This was still the second highest April sales since our data began in 2007.
Here are the sales statistics for April since 2007:
- 2007: 2419 sales
- 2008: 1886 sales
- 2009: 1407 sales
- 2010: 1984 sales
- 2011: 1466 sales
- 2012: 1816 sales
- 2013: 2392 sales
- 2014: 2256 sales
- 2015: 2435 sales
- 2016: 2706 sales
- 2017: 2647 sales
- 2018: 2700 sales
- 2019: 2595 sales
- 2020: 2057 sales
- 2021: 3360 sales
- 2022: 3181 sales
Here are the median prices:
- 2007: $289,800
- 2008: $300,000
- 2009: $218,000
- 2010: $225,000
- 2011: $169,000
- 2012: $182,000
- 2013: $223,500
- 2014: $250,000
- 2015: $271,325
- 2016: $286,000
- 2017: $297,500
- 2018: $307,500
- 2019: $310,000
- 2020: $338,000
- 2021: $373,750
- 2022: $370,000
“Rising mortgage rates and lack of inventory made an impact on the market in April,” said Antje Gehrken, president of the Chicago Association of REALTORS® and president and designated managing broker of A.R.E. Partners. “Closed sales and median sales price stabilized, meaning buyers are still out there, but due to these factors may be taking more time during their home search.”
The average 30-year fixed mortgage rate in April was 4.98% up from 4.17% in March and up from 3.06% last year.
“Low inventory continues to be a factor in the market, pushing sales lower and prices higher in many areas of the state in April, but buyer demand remains strong,” said Ezekiel “Zeke” Morris, president of Illinois REALTORS® and designated managing broker of EXIT Strategy Realty/EMA Management on the South Side of Chicago. “Those who are eager to get into the spring market will want to move quickly and lock in mortgage rates before they move higher.”
Chicago inventory fell 28.6% year-over-year to 6,069 properties from 8,502 properties last year.
This mirrored the drop in statewide inventory which fell another 28.9% to 19,958 properties from 28,055 last year. In April 2019, before the pandemic, statewide inventory was 56,094.
Chicago days on the market fell 8.6% to 32 days from 35 days last year.
Single family homes remain more in demand with sales up 7.8% to 1032 while condo sales were down 10.6% year-over-year to 2149.
Will the higher rates crush the May market?
Demand remains strong for Illinois homes in April despite fewer choices and interest rate hikes [Illinois Association of Realtors Press Release, by Bill Kozar, May 19, 2022]
“ The average 30-year fixed mortgage rate in April was 4.98% up from 4.17% in March and up from 3.06% last year.”
Didn’t you say buyers were locked in to lower rates? Why use the April rate as a metric if that was the case and shouldn’t sales still have been HAWT ™?
Or is your contention that 4% rates caused the end of the HAWT ™ market and the fear of raising rates pulled housing sales forward?
Until prices reflect the increased costs of borrowing, inventory is going to stay low. Upgrading is taking a kick to the beanbag – rates, pricing hangover & inflation are killing any incentive to move for current home owners
The starter condo buyer is f’d – good thing they listened to the Boomers!
Nationally:
New single-family home sales plunged by 16.6% from March and were down 26.9% year on year. New home sales dropped to the lowest level since the lockdown in April 2020.
New home sales are often viewed as a leading indicator of the state of the overall housing market.
The unsold inventory of new homes spiked by 34,000, a historic month-to-month leap. There were 440,000 unsold new homes (seasonally adjusted), the highest level since May 2008 in the midst of the housing bust. Both, the month-to-month and year-over-year increases in unsold new homes were the largest leaps ever recorded, both in numbers of unsold houses and in percentage terms.
Nothing wrong with a slowdown, that’s the Fed’s goal.
“Didn’t you say buyers were locked in to lower rates? Why use the April rate as a metric if that was the case and shouldn’t sales still have been HAWT ™?”
For 15 years I have cited the data in the IAR press release which includes the current monthly mortgage rate. Buyers in April would have been locked in earlier but if they locked in March they were still above 4%.
Sales WERE hot in April. Second highest since 2007.
“The starter condo buyer is f’d – good thing they listened to the Boomers!”
Rents continue to rise and are at record highs. Many buyers will want to lock in their monthly costs rather than be at the mercy of a landlord and further increases next year. But there’s no doubt that first time buyers will be impacted the most by rising rates as they are so monthly payment dependent and will need an even larger down payment to get to the payment they want.
Move-up buyers have home equity to roll over. Not as rate sensitive.
Should be a good year for home remodel companies. Many will simply remodel their current home, if they can.
If inventory remains this low, then prices will remain elevated. There are always people who will be in the market to buy. Heck, people bought with 15% mortgage rates in the late 1970s.
Lol.
It will mean fewer multiple offers and longer market times for properties. Sellers will have to price more competitively, depending on location.
This 3-bedroom townhouse in Southport that we chattered about a few weeks ago, is still available even though another unit in the complex, one that doesn’t face the front of the street, is under contract at the same price.
This is the slowdown I’m seeing out there this month. Inventory remains really low in Lakeview. Not many 3-bedrooms priced at this level. Southport remains as popular as ever.
Yet, it remains available.
I wonder if they got some lowball offers that they passed on?
https://www.redfin.com/IL/Chicago/3543-N-Bosworth-Ave-60657/unit-A/home/13384074
“Nothing wrong with a slowdown, that’s the Fed’s goal.”
Yep. The Fed is trying to wipe speculation out of that market. It’s overheating. All the people who post on this blog from Florida will tell you. 100% price increases in a year? Come on. Absurd.
But as for new home sales, why should anyone be surprised by this drop? Mortgage rates went up the quickest in 30 years. If you were thinking of putting down a deposit on a new home at 3.5% in San Antonio, you decide against it at 5.5%. Especially if you believe that rates are going to go higher. Because while some can lock in rates in advance on a new home purchase, that costs extra money too.
I wonder if some of those new home buyers won’t just buy existing homes, if they can find them, because they can lock in and close right now?
Just too risky in this kind of rising rate environment to enter into a contract, with a deposit, where you won’t get the house for 8 to 12 months.
Also, in some markets nationally, many first time buyers will be priced out. This would be true on the coasts or even in cities like Austin where average new build is now over $500k. Some buyers may not qualify. They are deciding to stay where they are, for now. The quick rise in rates over 5% for the first time in 5 years, combined with record high prices, is just too much for some buyers.
“For 15 years I have cited the data in the IAR press release which includes the current monthly mortgage rate. Buyers in April would have been locked in earlier but if they locked in March they were still above 4%.
Sales WERE hot in April. Second highest since 2007.”
So if buyers were locked into lower rates, why did the market slow? Shouldnt that have pulled more buyers in based on the fear of raising rates?
“Rents continue to rise and are at record highs. Many buyers will want to lock in their monthly costs rather than be at the mercy of a landlord and further increases next year. But there’s no doubt that first time buyers will be impacted the most by rising rates as they are so monthly payment dependent and will need an even larger down payment to get to the payment they want.”
Really horrible financial advice. Renters have options, the 2/2 owner not so much
Where is this larger down payment coming from? Markets down signifigantly
“Move-up buyers have home equity to roll over. Not as rate sensitive.”
Small sample size and all but… I dont know anyone that is willing to give up their 3% rate to move up at this time (barring an order of magnitude raise).
What equity? The <5 year owner has little to none after costs
Chicago has lagged the rest of the US. Appreciation has been minimal. Unless you're going to count the "equity" from an TR thats been updated, but then you need to figure the costs somewhere
"Should be a good year for home remodel companies. Many will simply remodel their current home, if they can."
The first correct thing you've posted in a long time – glad you're agreeing with me
"If inventory remains this low, then prices will remain elevated. There are always people who will be in the market to buy. Heck, people bought with 15% mortgage rates in the late 1970s."
Yes they did, what does that have to do with todays market?
“Should be a good year for home remodel companies.”
“The first correct thing you’ve posted in a long time”
When’s the last year that wasn’t? Where are they getting their labor? It’s super tight out there.
“:Many buyers will want to lock in their monthly costs rather than be at the mercy of a landlord and further increases next year.”
this would make sense if assessments and taxes weren’t going to rise at all…
“this would make sense if assessments and taxes weren’t going to rise at all…”
I guess someone forgot to tell those down in Texas who are buying in droves even while property taxes are spiking.
“So if buyers were locked into lower rates, why did the market slow?”
It didn’t slow. Just as hot as March. It’s incredible that we’re still seeing these 15 year highs in monthly sales after seeing this red-hot market last spring as well. But the job market is still strong, so that always puts support under the housing market.
Still hot in the suburbs…
$380k (31%) over ask
https://www.zillow.com/homedetails/915-Forest-Glen-Dr-E-Winnetka-IL-60093/3359307_zpid/?
$220k (17%) over ask
https://www.zillow.com/homedetails/864-Burr-Ave-Winnetka-IL-60093/3359541_zpid/
$150k (17%) over ask
https://www.zillow.com/homedetails/402-Hawthorn-Ln-Winnetka-IL-60093/3363793_zpid/
$210k (18%) over ask
https://www.zillow.com/homedetails/1139-Asbury-Ave-Winnetka-IL-60093/3359242_zpid/
All closed within the last week.
Thanks for the update on these Winnetka properties.
Wow. Haven’t seen closing prices that much over list in the Chicago suburbs in a LONG time. You only get that with bidding wars.
Just posted my May update: https://www.chicagonow.com/getting-real/2022/06/chicago-real-estate-market-update-2nd-highest-may-sales-in-16-years/
Sales are still strong. The signs of weakness are in the contracts being written. Eventually that will flow through to closings. However, market times are lower and months of supply are still extremely low.
“Sales are still strong. The signs of weakness are in the contracts being written.”
Thanks for the update Gary. Inventory remains very tight. Unique properties still going under contract quickly.
Haven’t you been saying that contracts being written have been weakening for several months now? Should show up at some point, I agree. But without more inventory, prices remain elevated even with higher rates.
Yeah, this is the third month with significant decline in contracts YOY. The way we keep getting the sales is the draw down in pending home sales.
https://news.crunchbase.com/startups/tech-layoffs-2022/
Since Chicago is such a big tech hub, this is probably NBD
“Since Chicago is such a big tech hub, this is probably NBD”
That’s what will make this tech slowdown different from the dot-com bust, right?
Silicon Valley and Silicon Alley hit the hardest in 2000-2001 recession. Chicago, LA, Houston, Atlanta and even DC, were not. Barely even noticed.
But now, with HQ2 and big secondary offices, pain of any layoffs will be spread out nationwide. Seattle not the only city hurt if Amazon lays off, Nashville and DC will be too.
Biggest impacts in Chicago, so far, was with the layoffs in Cameo (not yet public) and Coinbase. Lots of Coinbase jobs in Chicago. They have laid off, frozen hiring and are rescinding offers.
Thankfully, Chicago has a diverse economy. We’re big in transportation, finance, tech, food and agriculture. United was hiring 5,000 people just a few months ago. Huge job fair at O’Hare.
Oh, and while these headlines might sound scary, Challenger Gray & Christmas said that job cuts through May in 2022 were their lowest since they began tracking the data in 1993. Tech layoffs make big, scary headlines, but they aren’t the entire US economy. And even tech layoffs are low.
“Biggest impacts in Chicago, so far, was with the layoffs in Cameo and Coinbase. Lots of Coinbase jobs in Chicago. They have laid off, frozen hiring and are rescinding offers.”
LOL – Tech was going to keep the ball rolling, now its NBD
“Thankfully, Chicago has a diverse economy. We’re big in transportation, finance, tech, food and agriculture. United was hiring 5,000 people just a few months ago. Huge job fair at O’Hare.”
Ave wage rate on these 5k positions?
“Oh, and while these headlines might sound scary, Challenger Gray & Christmas said that job cuts through May in 2022 were their lowest since they began tracking the data in 1993. Tech layoffs make big, scary headlines, but they aren’t the entire US economy. And even tech layoffs are low.”
Compared to what?
The tech layoffs/freezes/etc are a sign that growth at any cost is dead. This is going to hammer young professionals that thought that $200k jobs grew on trees and you could swap jobs and get a pay raise every 6 months.
Reality is going to be a cruel mistress
“Ave wage rate on these 5k positions?”
I don’t know. It ran the gamut. They are desperate. Airline jobs pay well. Airport jobs too. Not everyone is making $200k as a tech engineer JohnnyU. Chicago’s economy is diverse. Lots of places to live and lots of different jobs at different pay levels.
That’s why we haven’t had the big booms and busts. Hooray. Good diverse economy. But we DO have plenty of tech jobs now. They will slow hiring, for sure. Every city is going to get hit when the FANGMAN puts on a hiring freeze.
“Compared to what?”
Like I said, layoffs are the lowest since they began tracking the data in 1993. Therefore, by definition, tech layoffs are just as low as the overall layoffs.
17,000 layoffs in that article you linked to. US economy just added 380,000 last month. 17,000 is NOTHING. 11 million job openings right now.
Here’s the actual data from Challenger Gray & Christmas. It’s down nearly 50% from last year’s job cut announcement which NO ONE was even mentioning, by the way. But now because of “scary” headlines and Elon Musk saying he “might” have to cut 10% of his workforce, everyone is freaked out.
Dumb.
“So far this year, employers announced plans to cut 100,694 job cuts, down 48% from the 192,185 cuts announced through the same period in 2021. It is the lowest recorded January-May total since Challenger began tracking monthly job cut announcements in 1993*.”
https://www.challengergray.com/blog/may-2022-challenger-report-job-cuts-fall-overall-but-explode-in-tech-fintech-construction/
“The tech layoffs/freezes/etc are a sign that growth at any cost is dead. This is going to hammer young professionals that thought that $200k jobs grew on trees and you could swap jobs and get a pay raise every 6 months.”
Tech was always going to slow. That’s what it does. It has the big bull spurt with innovation and then it regroups. They always overhire and have to lay off.
But the jobs do grow on trees. Until there is an actual recession, still plenty of hiring going on. Great time to be early in your career, no matter what it is.
From Challenger Gray & Christmas May jobs report:
“Employers in the United States announced 126,083 hiring plans in May, primarily on plans from Ace Hardware to hire 40,000 associates and 7-Eleven, which plans to hire 60,000. So far this year, Challenger has tracked 612,686 hiring announcements, up 39% from the 441,696 hiring plans announced through May of last year. It is the second-highest January-May hiring total since the firm began tracking hiring plans in 2006. The record occurred in 2020, when 1,260,661 hiring plans were announced in the first five months of the year.”
And I don’t understand why JohnnyU is rooting against the US economy, and Chicago, once again.
Why?
Why do you want mass layoffs? Why do you want “young professionals” to be “hammered”? Why can’t the workers have the upper hand for once? Why can’t the US economy be humming along with strong demand, growth and pay increases for several years?
Why does it always have to be that the doom is here (or coming) instead of, hey, the United States is crushing it against all odds during a pandemic?
I don’t get it. It must be so tiring being that negative every day.
“And I don’t understand why JohnnyU is rooting against the US economy, and Chicago, once again.
Why?”
Why do you make stuff up? Injecting some reality into your insane Pollyanna blathering is all I’m doing.
“Why do you want mass layoffs? Why do you want “young professionals” to be “hammered”? Why can’t the workers have the upper hand for once? Why can’t the US economy be humming along with strong demand, growth and pay increases for several years?”
It called reality/sobriety – you should try them
Pay increases have been concentrated. I’d rather see the MC/Trades start doing better
“Why does it always have to be that the doom is here (or coming) instead of, hey, the United States is crushing it against all odds during a pandemic?”
Psaki & Jean-Pierre would actually bush reading what you type
“Why does it always have to be that the doom is here (or coming) instead of, hey, the United States is crushing it against all odds during a pandemic?”
Why is it always an extreme?
Is there zero middle ground? Either it’s DOOM!!!! or BOOOOOM!!!, no ‘huh, doing pretty well’, or ‘maybe some headwinds’, or maybe a little of both?
“Pay increases have been concentrated. I’d rather see the MC/Trades start doing better”
Ba ha ha ha.
SS Administration is expecting more money to come into the system this year with wages up anywhere from 5% to 8% from last year.
Largest wage increases were in the service sector/lowest wage earners. Maybe that’s not the trades.
We ARE crushing it. Look around the world. No country has come out of the pandemic like the United States. China can’t even reopen. Although Europe could be a surprise, as a group, if the Ukraine War ends soon. Lots of spending will go into reconstruction. European consumer is strong too.
So tired of your doom and gloom. It’s just really so sad. Like I said, it just must really suck to wake up every day expecting the end of the world when you live in the greatest country, with the greatest economy and opportunities, on earth.
Rodkin declares the local housing boom over:
https://www.chicagobusiness.com/residential-real-estate/chicago-covid-housing-boom-over
Ha ha ha. Rodkin is *such* a dolt. He’s hilariously useless. He hedges his bets by making alternating claims on alternating weeks.
Here are some headlines and text from his recent reporting:
May 30 (print): “2020s condo boom skips downtown. Crime, slow return to offices are among the factors keeping a lid on prices in the city’s glitziest areas.”
May 31 (web): “Home prices hit 11th month of double-digit price gains. Values across the metropolitan area rose strongly again in March, despite weakness in the city.”
June 2 (web): “Chicago-area home prices surge despite a downtown slump”
June 6 (print): “Highest-priced condos and crime are neighbors. One Chicago is selling at a record price per square foot.” … “One Chicago is landing benchmark prices, despite being kitty-corner from the McDonalds at Chicago Anenue (sic) and State Street where two were killed….”
June 13 (print): “High-end homes sold like crazy in 2021. It’s even crazier this year. 2022 isn’t half over, but already more homes in the area have sold at $4 million or more than is typical for a full year. ‘The appetite, I would say, is voracious,’ one agent says.”
June 21 (web): “Chicago’s housing boom is over. Home sales dip below normal pre-COVID levels for the first time since the pandemic-era boom started.” … “For the first time since the pandemic-era housing boom began, Chicago-area home sales in May dropped below the level of pre-COVID years, a clear signal that the boom is gone.”
Gone?
‘How are you today? Making a deposit are we? Great. We can just put that into your retirement account . . . and it’s gone.’
https://www.youtube.com/watch?v=-DT7bX-B1Mg
June 21 (web): “Chicago’s housing boom is over. Home sales dip below normal pre-COVID levels for the first time since the pandemic-era boom started.” … “For the first time since the pandemic-era housing boom began, Chicago-area home sales in May dropped below the level of pre-COVID years, a clear signal that the boom is gone.”
He’s citing the “Chicago area” in this headline where sales were below the pre-pandemic level for the first time in May. Chicago home sales were still smoking hot, however.
Could be that inventory is just too low in the suburbs so there’s nothing to buy, even though demand remains. Hard to know yet. Many properties are going under contract almost instantly upon being listed.
I was going to crib on this 2/1 at 3656 N. Bosworth, but it went under contract in just 1 day.
Lol.
https://www.redfin.com/IL/Chicago/3656-N-Bosworth-Ave-60613/unit-2N/home/52455790
I was going to crib on this gorgeous vintage 3/2 in East Lakeview listed at $775,000. It even has parking.
Dan #2 this one is for you.
But it went under contract in just 5 days.
https://www.redfin.com/IL/Chicago/516-W-Roscoe-St-60657/unit-2/home/12792208