Market Conditions: Chicago April Sales the Highest Since the Housing Boom
The Illinois Association of Realtors is out with the April market stats.
It was another red-hot month, even ignoring year-over-year comparisons.
Just a reminder, last April saw sales fall 22.2% to the lowest in 8 years (since the 2012 bottom in the housing bust) due to the first coronavirus lock down and restrictions.
In the city of Chicago, home sales (single-family and condominiums) in April 2021 totaled 3,283 homes sold, up 59.6 percent from April 2020 sales of 2,057 homes.
The median price of a home in Chicago in April 2021 was $374,000, up 10.7 percent compared to April 2020 when it was $338,000.
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: 3283 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: $374,000
The real shocker was the strength of the condo market with condo sales up 76.9% to 2,349 while single family home sales rose 28.1% to 934.
“The market in April was hot! The steep year-over-year increase in closed sales and median price shows the hesitancy of buyers and sellers at the beginning of the pandemic last April compared to the comfort they are feeling in the market now,” said Nykea Pippion McGriff, president of the Chicago Association of REALTORS® and vice president of brokerage services at Coldwell Banker Realty. “Over the last few months, it seems like buyers have re-evaluated their desires, and we’ve seen a considerable uptick in the condo market, which is also a signal of buyer confidence and comfort moving into summer.”
Statewide, the number of days on the market fell to 38 days from 53 days last year.
In Chicago, the number of days fell to 35 from 36 days last year.
Statewide, the number of homes for sale fell 48.7% to 24,749 from 48,232 last year. For comparison purposes, inventory was 56,024 in April 2019.
Chicago inventory fell 6.3% in April to 7,690 from 8,217 properties last year.
The 30-year fixed rate average mortgage was 3.06% in April, down from 3.08% in March. It was also lower than last year, which averaged 3.31%.
“While consumer sentiment indices increased, there was a marked difference in attitudes towards home purchases,” said Geoffrey J.D. Hewings, emeritus director of the Regional Economics Applications Laboratory.
“The Fannie Mae index revealed that the percentage of those who feel it is a good time to buy a home decreased from 53 percent to 47 percent, while on the other hand, the percentage who feel it is a bad time to buy increased from 40 percent to 48 percent. These changes reflect the continuing low inventory problem and the lack of housing variety that seem to override the attractive interest rates that are still available.”
Strangely, even though there is clearly limited inventory, sales continue to be red-hot.
Year-to-date, through April, sales in Chicago are up 33.9%.
How much longer will this hot housing market last?
Will higher prices cool the frenzy?
Illinois home sales jump 35.3 percent in April, statewide median price up 14.5 percent [Illinois Association of Realtors, Press Release, May 21, 2021]
Hope I am wrong, but I predict this bubble is going to pop in the coming months. Housing, stock market, everything, it’s just not on a sustainable trajectory.
“The real shocker was the strength of the condo market with condo sales up 76.9% to 2,349 while single family home sales rose 28.1% to 934.”
I know you’re lazy and all, but would it hurt you to put in some information as to the comparison?
Assuming that this is compared to last year, if so SFH is basically flat.
“Hope I am wrong, but I predict this bubble is going to pop in the coming months. Housing, stock market, everything, it’s just not on a sustainable trajectory.”
https://media1.tenor.com/images/7ef7999da8b41dc97b841f7ba2611691/tenor.gif?itemid=16865595
The only thing i can predict at this point is whatever is logical will not happen.
I’m in a indecisive holding pattern. There is only one house currently on the market that I’d even consider buying. My condo is not on the market, so it’s not like I can make an offer on the one house I like. The house didn’t go under contract over the weekend, which is surprising.
I’m not at all surprised that sales of condos are up. No one wanted to live in a condo last year. There are also more condos available, especially at prices that are affordable to middle class people. I’m curious if the median sales price of condos is also up. It seems as though condos in my building are selling for a little more than last year.
The Trib reports:
“The city of Chicago will provide almost $80 million in rental and utility payment assistance for renters and landlords . . . up to 15 months of rental assistance and utility payment assistance for eligible renters.”
The city expects to award 10,000 such grants, an average of $8,000 each.
The FAQ states eligibility is restricted to renters whose
• household income in 2020, or at the time of application is below $52,200 and preference will be given to households who make less than $32,600.
• “The household experienced a financial hardship, including a loss of income or increased expenses, due to the COVID-19 pandemic. Hardship includes a reduction of work hours, unemployment, taken time off to care for oneself or loved ones who were ill with COVID-19, and taking time off because you or someone in your household is vulnerable to COVID-19.”
https://www.chicago.gov/city/en/depts/doh/provdrs/renters/svcs/emergency-rental-assistance-program.html
“The median price of a home in Chicago in April 2021 was $374,000, up 10.7 percent compared to April 2020 when it was $338,000.”
Why are we even comparing to April 2020….
Per Illinois Realtors from Crains article….
“From March to April, the median price of homes sold in the metropolitan area grew by 8 percent, and in Chicago it rose 5 percent.”
Quite the contrast – only 5% in Chicago. Pretty pathetic when this period is getting cast as the “hotest ever”.
https://www.chicagobusiness.com/residential-real-estate/april-home-sales-way-and-not-just-weird-2020
Lol, mental gymnastics. IL/Chicago still underperforming almost every state, so you’re still losing money. The only “win” in real estate is if you outperform the place you desire to live otherwise.
Annoying anecdote: I’m still looking at my condo that I sold in 2017 and the closest comp which is several floors higher sold for 100k less than my selling price on May 10. That’s a 13.5% loss in 4 years while property taxes climbed 17% and the assessment climbed 20%.
Downtown condos = bagholder city sorry
“Lol, mental gymnastics. IL/Chicago still underperforming almost every state, so you’re still losing money.”
Real estate is local. For every owner crushing it in the West Loop, Logan Square, LaGrange and Downers Grove, someone isn’t in the Gold Coast, Lincoln Square, Highland Park.
And, AnonIDGAF, you’re looking at “downtown condos.” And yeah, that’s the most challenged market.
BUT- inventory is contracting there too. And as the city reopens there will be pressure on prices even downtown. But you’ve got to get rid of the inventory first.
“From March to April, the median price of homes sold in the metropolitan area grew by 8 percent, and in Chicago it rose 5 percent.”
Wait- from March to April prices in Chicago jumped 5%?
Wow. Damn. The sizzle.
I don’t remember the last time THAT happened in Chicago but it was definitely in the housing bubble years of 2005-2006 when people were flipping those condos.
Yeah- this IS the hottest time in Chicago real estate. Multiple offers everywhere. Nearly all of the sales are existing homes- not much new to sell.
“The city of Chicago will provide almost $80 million in rental and utility payment assistance for renters and landlords . . . up to 15 months of rental assistance and utility payment assistance for eligible renters.”
Excellent news.
And this is just the city of Chicago program. The state is spending $1 billion to help landlords/tenants. They are eligible for up to $22,000, I believe.
“I’m curious if the median sales price of condos is also up. It seems as though condos in my building are selling for a little more than last year.”
All depends on the location Jenny.
Condos in certain neighborhoods are crushing it with prices at record highs. Downtown high rises, not so much. West Loop seems to have cooled but it was at record prices going into the pandemic.
Hot neighborhoods like Logan Square, Bucktown, West Town continue to be hot.
“Assuming that this is compared to last year, if so SFH is basically flat.”
Yes, JohnnyU, it’s year-over-year.
How can SFH sales be “basically flat” when they were up 28.1%?
And, yes, it’s comparing to a month when we were in lockdown, although most of those contracts were entered into well ahead of the lockdown so likely weren’t impacted as much by COVID.
That condo sales number is the bomb though. Wow. Sizzle. I’ve never seen numbers like that and I’ve been running this blog since 2007.
The number of condo sales basically equalled what the TOTAL number of April sales is normally in most given years.
Damn.
People are buying everywhere. And everything.
“Wait- from March to April prices in Chicago jumped 5%?”
A friendly reminder that prices =/= median prices of homes sold.
“A friendly reminder that prices =/= median prices of homes sold.”
Ha ha. Yes, indeed.
And what was closing in April?
A few dozen million dollar+ condos in the new construction St Regis.
“ Yes, JohnnyU, it’s year-over-year.
How can SFH sales be “basically flat” when they were up 28.1%?”
I thought 2020 was an outlier?
Do the math
Interesting take from Bobby S –
bUY NOw oR Be pRIcEd oUt ForEVeR
“According to Shiller, current home price action is also reminiscent of 2003, two years before the slide began. He notes the dip happened gradually and ultimately crashed around the 2008 financial crisis.
“If you go out three or five years, I could imagine they’d [prices] be substantially lower than they are now, and maybe that’s a good thing,” he added. “Not from the standpoint of a homeowner, but it’s from the standpoint of a prospective homeowner. It’s a good thing. If we have more houses, we’re better off.”
Also interesting to see who’s sucking hind tit – https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20210525-1381359/1381359_cshomeprice-release-0525.pdf
“A friendly reminder that prices =/= median prices of homes sold.”
Correct and there are more bidding wars at the upper end of the market compared to the middle or lower. So 5% seems meh.
It’s only just recently that my condo is worth what the original owner paid in the early 2000s. If I sell, I will make a killing, but if I buy, I am extremely worried that I won’t even be able to get back what I put in even if I stay for 10+ years. It’s so expensive to sell a house. I’m looking in the $500,000 range and I keep thinking to myself, “How long will it take for the house to be worth $550,000, so I can sell and not lose money?”
When I compare myself to my friend who is looking in the Seattle area, I feel lucky to live in Chicago. The competition there is intense. Houses are going under contract in a day with all contingencies waived.
“It’s only just recently that my condo is worth what the original owner paid in the early 2000s.”
Crains today: “In March, Chicago-area home prices were still 5.4 percent below their old peak, in September 2006, according to the indices, while nationwide, prices were 27 percent above their old peak.”
So that sounds about right unfortunately.
“but if I buy, I am extremely worried that I won’t even be able to get back what I put in even if I stay for 10+ years.”
and there’s the rub. Pray for continued onerous zoning rules to limit supply where you buy to offset the downside of property tax increases?
“In March, Chicago-area home prices were still 5.4 percent below their old peak, in September 2006”
And that’s in nominal dollars.
In real dollar terms, that’s like being 27.5% below prior peak.
Glenn Kelman tweets:
#4: [Inventory is down nationwide] But in two of America’s largest cities, inventory has increased, in New York by 28%, in San Francisco by 77%. San Francisco hasn’t had an inventory increase this large since 2008. And still in both markets, prices are increasing.
#13: The average housing budget for out-of-towners moving to Nashville was $720K, ~50% higher than locals’ $485K budget. It used to be coastal elites who worried that every adult in the family had to win a career lottery, just to afford a home. Now that feeling may spread.
#14: 90% of people earning $100,000+ per year expect to be able to work virtually, compared to 10% of those earning $40,000 or less per year. The folks who need low-cost housing the most have the least flexibility to move.
https://twitter.com/glennkelman/status/1397189637207121929
“inventory has increased, in New York by 28%, in San Francisco by 77%.”
This means nothing.
San Francisco inventory has always been low. If there are 100 homes on the market last year and now there is 200, so?
“I’m looking in the $500,000 range and I keep thinking to myself, “How long will it take for the house to be worth $550,000, so I can sell and not lose money?”
I’ve said for over a decade that Chicago home buyers had better be ready to make more than the 6% selling fees and that could mean living somewhere longer than 2 years. You’re going to lose money.
Owning a home in Chicago is a real investment. Yeah- if you’re going to move in a few years, just rent. Transaction costs are real.
“Correct and there are more bidding wars at the upper end of the market compared to the middle or lower. So 5% seems meh.”
There are?
There’s an excess of inventory in the luxury price point. So, no, this is incorrect.
The bidding wars are on the starter $275,000 1-bedroom condo and the $400,000 3-bedroom starter home in Park Ridge.
“I thought 2020 was an outlier?”
You have the 2019 single family sales?
Yeah- the lockdown was happening in April 2020. But a lot of the contracts would have happened prior to the lockdowns. April 2020 was at 8 year lows.
By the way, Redfin is saying that 36% of all Chicago properties accept an offer within the first week.
I’d say that’s sizzling.
“ You have the 2019 single family sales?”
If you can do basic math you do
“Yeah- the lockdown was happening in April 2020. But a lot of the contracts would have happened prior to the lockdowns. April 2020 was at 8 year lows.
You loves the sound of your own voice don’t you?
“There’s an excess of inventory in the luxury price point. So, no, this is incorrect.”
All of Redfin and Zillow’s data says this.
Further, your comment yesterday:
“And what was closing in April?
A few dozen million dollar+ condos in the new construction St Regis.”
This should be skewing the median sales number up more than just 5%.
“By the way, Redfin is saying that 36% of all Chicago properties accept an offer within the first week.”
Cite the source. As Redfin’s Chicago April report (link below) does not say that. Chicago homes are selling on average in 20 days. Their “how hot is the market index” is listed at 55 on a scale of 0 to 100.
https://www.redfin.com/city/29470/IL/Chicago/housing-market
“This should be skewing the median sales number up more than just 5%.”
We can’t know that based only on these data points:
N=3283 v 2877 in March
An “extra” 60(? 35?) above median
Hell, median *could* go down–there are another 300+ sales that could have been below median.
“Cite the source.”
https://lmgtfy.app/#gsc.tab=0&gsc.q=redfin%20Chicago%20is%20a%20hot%20market.%2036%25%20of%20homes%20accept%20an%20offer%20within%20a%20week.
Scroll past the ads–it’s in every Redfin result.
Redfin price estimates are about as reliable as Moodys AAA rated MBS were in 2006. Everything you read, watch and hear now is propaganda. It’s all BS, every CNBC article is paid advertising, social media posts are paid or censured, every FED statement is massaged for a desired effect, every government report is skewed and politicized to show preferred results. The only thing you can trust is your eyes and mine tell me most of Chicago is still stuck in 2014 or earlier price ranges. Even a lot of commentors’ anecdotal evidence supports this. There’s some hot action in some desirable suburbs’ best areas and a ton of action in Florida, Texas and Colorado right now. But this whole nationwide housing narrative is utter and complete BS being pushed harder than Russian election interference. I would not doubt if the Blackstones of the world are churning the market to prop up the millions of houses they own in order to exit without losses, and once they do the bottom drops again.
“the Blackstones of the world are churning the market to prop up the millions of houses they own in order to exit without losses”
1. Who is selling their SFR portfolios? To whom?
2. The returns on those portfolios have been great. What do they re-deploy into to match those returns?
3. Where do you get the idea it is “millions”? I don’t find evidence that it is as much–industry wide–as a single million. See, eg: https://www.altusgroup.com/services/wp-content/uploads/2020/11/AG_WhitePaper_SFRH.pdf
So if market is hot hot hot, and our home values are up up up…
…Is the Cook County Assessor gonna royally screw us?
“The returns on those portfolios have been great. What do they re-deploy into to match those returns?”
You know how a private equity fund works right? You don’t “re-deploy” the returns as the fund has wound down as capital is returned back to the LP’s of the Fund. Blackstone’s goal is not to match or exceed previous returns (although that is obviously a plus); it’s to clear the IRR hurdles in the marketing and fund documents to generate carried interest and maximize fees for the Management Company.
The reason why the SFH market is lucrative for a private equity firm is debt is cheap, SFH’s are low risk compared to an LBO or investing in some middle market company, and the LP’s get a steady, predictable annual dividend.
“Where do you get the idea it is “millions”? I don’t find evidence that it is as much–industry wide–as a single million. See, eg:”
Industry wide it’s at least a million. There’s over 16 million SFH’s that are rented each year so only a 6% market share gets one to 1 million. Invitation Homes is the largest alone owns 80K.
https://www.housingwire.com/articles/blackstone-gets-back-into-the-single-family-rental-game/
“…Is the Cook County Assessor gonna royally screw us?”
Likely. Remember what they did last year during Covid. They did a haircut on valuations in south cook county. Further, this year all of the commercial landlords in the city will cry poor from Covid. On top of this Fritz is trying to move past the Berrios years and level the playing field.
The County still needs to raise the same amount plus a couple percent more than they did last year. Going to be tough to increase most commercial valuations which shifts more burden to homeowners. Moving past the Berrios years means shifting more burden onto the “green zones”. Looks like a double whammy to me unless you have a buddy on the property tax appeals board.
Oh and lastly remember the City passed automatic annual property tax increases last year. I think the formula was based on annual CPI or maybe CPI + 1%? So that would a triple whammy and that’s before we start talking budget deficits.
Good thing CPI only increases by 1% – 1.5% each year….. until this year of course where we are at 4.5% YoY change. Hopefully that moderates.
https://patch.com/illinois/chicago/property-taxes-going-indefinitely-city-council-passes-budget
“Industry wide it’s at least a million. There’s over 16 million SFH’s that are rented each year so only a 6% market share gets one to 1 million. ”
Cite, please.
From my link, published in Nov-20:
“Despite rapid growth, it is estimated that institutional ownership (portfolios with over 2,000 properties) is between 2.1% to 2.5% of the total SFR units, or 350,000 and 400,000 homes.”
So if I want to sell my East Lakeview condo, in which I am unhappy and life to too short to be unhappy, do people agree that this summer is as good a time as any? I’d wait another year if I thought the price would go up another 5%, but I don’t see signs of that. BTW, I paid $569 three years ago and did a 30k cosmetic remodel. I realize I’m going to take a bath.
“Cite, please.”
Your link is limited as it defines institutional ownership as minimum 2,000 homes. Investors own and rent out 18.2 million detached homes. There is obviously a caveat that most of these homes are owned by “investors” owning less than 5 or 10 homes.
I’m not sure how Fannie or Freddie could come up with an accurate numeric as Pension Funds, Sovereigns, Family Offices, PE, and Hedge Funds don’t have to disclose their investments unless they are public or to comply with SEC regulations.
The NY Times states that investors purchased one-fifth of all single-family starter homes on the market in 2018.
https://www.urban.org/urban-wire/surge-investors-single-family-homes-raises-three-concerns
“Cite, please.”
Adding from my earlier comment. It’s hard for me to believe that two companies Tricon (30,000 homes) and Initiation (80,000 homes) own a combined 110,000 homes in the US or 27% – 31% of all institutional homes per your previous link from Freddie when the institutional players look at housing as a commodity.
Commodities typically have low barriers to entry and buying houses has one of the lowest barriers to entry as you can use Bank debt and/or raise third party capital with little/no track record.
So, you’ve got nothing.
Just a “hard to believe”.
Note that every reno-flip property counts as “bought by an investor” at least once.
“buying houses has one of the lowest barriers to entry”
——————————-
The transaction costs are enormous for buying houses, even if you avoid real estate agents and their commissions. Tile searches, surveys, transaction taxes/recording fees, and the illiquidity premium all add up.
High barrier to entry for buying developed real estate at scale.
@Tsippi I’m struggling with the same thing. I’m holding back because there’s not much on the market I like and is in my price range. I’m almost thinking that I should sell and then rent until there’s more inventory on the market.
“High barrier to entry for buying developed real estate at scale.”
Compared to buying an airline, oil company, farmland, Bank, tech company, car dealer, manufacturer, hotel, restaurant, newspaper, etc?
From a barriers to entry point buying developed residential real-estate is a walk in the park compared to any of the above. Just think of those transaction costs not to mention the compliance and regulation.
@Tsippi and @Jenny,
I am in the same position. My condo was making me so miserable I have been at my parent’s house since December. Eighteen months ago I was bored of it and thinking about new furniture and a renovation would help, but now I hate it all. How soon, if ever, will the Loop market come back? Do I wait a year or do I risk even more civil unrest to scare new away residents
I want a townhouse with a full sun rooftop deck near the lake, south of North. The available places are awful. https://www.zillow.com/homedetails/1333-S-Indiana-Pkwy-Chicago-IL-60605/2070760932_zpid/ and https://www.zillow.com/homedetails/26-E-14th-Pl-APT-4W-Chicago-IL-60605/80810702_zpid/
Maybe next winter there will be something better with a desperate owner willing to negotiate.
farmland,
—————————
What barrier to entry in buying farmland is there that is higher than buying houses at scale?
I agree re the rest (except maybe software companies, hotels, and car dealerships), but buying homes at scale has entry barriers higher than you expect, even before carrying costs like property taxes.
“Maybe next winter there will be something better with a desperate owner willing to negotiate.”
Why would an owner be “desperate” next year?
Economy will be strong. City will be back. Prices are only going to go up, not down.
Sorry I’ve been away. I had a family emergency the last few days that I had to deal with.
I was going to crib on this trendy Mediterranean inspired single family home in West Town but it’s already gone under contract.
https://www.redfin.com/IL/Chicago/1406-W-Erie-St-60642/home/14104284
“How soon, if ever, will the Loop market come back? Do I wait a year or do I risk even more civil unrest to scare new away residents”
There are sales happening in the loop but they are for depressed prices so buyers are getting “deals.”
I’ve been telling people anywhere downtown that if they don’t have to sell, they shouldn’t.
As the inventory dries up, prices will come back. Will have to wait a year or two. Unclear. We’ll see what happens as the city reopens, festivals return, the tourists arrive etc.
Further civil unrest is out of your control.
But if you hate it that much, then sell it for a loss if you can and move on. No use living somewhere you hate for another 2 years.
“I want a townhouse with a full sun rooftop deck near the lake, south of North. The available places are awful.”
“Near the lake” at this price point (under $600,000) will be your problem. There really aren’t many options. There are a few townhouse developments in the south loop which qualify but you’ve already linked to those. If those are “terrible” then you aren’t going to find much of anything “near the lake”.
You should look inland.
“I’m almost thinking that I should sell and then rent until there’s more inventory on the market.”
This is the dilemma right now. But the rental prices are pretty absurd as well. Try renting a condo/townhouse instead as the prices appear to be a bit lower.
“So if I want to sell my East Lakeview condo, in which I am unhappy and life to too short to be unhappy, do people agree that this summer is as good a time as any? I’d wait another year if I thought the price would go up another 5%, but I don’t see signs of that. BTW, I paid $569 three years ago and did a 30k cosmetic remodel. I realize I’m going to take a bath.”
Tsippi: The market is red hot with the highest number of sales in 15 years. You won’t have any trouble selling it this summer.
But what you sell it for, is the question. Selling within just 3 years is going to be tough.
East Lakeview hasn’t been hit nearly as hard as downtown. But selling within 3 years probably means you’ll be lucky to just escape at break even (especially given transaction costs like realtor fees, transfer tax etc.)
It all depends on the building, the properties amenities, how renovated it is etc. Does it have outdoor space that everyone is looking for?
Does it have parking, w/d, a/c?
Too many factors to know if you’ll “take a bath” or not.
No one can predict the future or know if Chicago prices will rise into next year. None of us has lived through a pandemic where the economy was shut down. We don’t know what “working from home” will actually be like in the next 6 months and how many will keep doing it full time. We don’t know how hot the economy will be and if many will be getting pay raises.
We don’t know if mortgage rates will rise which will result in stalling the Chicago market.
“ Economy will be strong. City will be back. Prices are only going to go up, not down.”
You’re basing this on rates being at or near 3%. At 3.5% it will slow, at 4% it’s going to have a significant negative impact.
Existing City home prices are being bolstered by insane spikes in material costs, limiting alternatives to a existing home prices. It’s kinda shocking that Chicago home prices haven’t escalated more (excluding urban pioneers)
“ Economy will be strong. City will be back. Prices are only going to go up, not down.”
Vs
“ No one can predict the future or know if Chicago prices will rise into next year.”
All in the span of roughly 30min
You and JoeZ should not be responding to posts/shilling at the same time
“You’re basing this on rates being at or near 3%. At 3.5% it will slow, at 4% it’s going to have a significant negative impact.”
Yep. Rising rates will have a significant impact.
It’s too hot right now. It’s overheating nationwide. Best thing that could happen would be for the housing market to cool off.
There is literally nothing on the market in some neighborhoods in Chicago. Prices are rising, somewhat dramatically in some areas. Affordability going to be an issue.
“1406 w erie”
Feature in Crain’s and the Trib last time around:
https://www.chicagobusiness.com/article/20170908/CRED0703/170909915/a-west-town-home-with-a-private-courtyard-for-1-1-million
Those sellers moved to Barrington Hills.
“literally nothing on the market in some neighborhoods in Chicago”
Which ones? How small are you defining a microhood to make that true?
“Which ones? How small are you defining a microhood to make that true?”
Just look at Hyde Park. And that’s just a start.
Yes- the 1406 w erie house was featured everywhere the last time.
Bought it in Oct 2017 for $1.1 million.
Under contract at $1.399 million.
We won’t know until it sells what profit, if any, they have made. But it’s looking likely they ARE going to make money.
But, you know, EVERYONE in Chicago is losing and the city is going down in the dumps.
“Just look at Hyde Park.”
Redfin’s “Hyde Park” (whether too big or too small) shows 67 homes active or coming soon.
67 is NOT “literally nothing”. It’s not really even figuratively nothing, as it is about 2 months of sales.
I suppose I would credit having something like 1 week’s worth of sales available as “nothing”.
So, where’s the 2d place that has “literally nothing”?
“Further civil unrest is out of your control. ”
—————————-
Doesn’t mean one should buy into it, though.
“at 4% it’s going to have a significant negative impact.”
not too sure about significant. that’s still pretty low historically.
“not too sure about significant. that’s still pretty low historically”
For the monthly payment crowd, it requires an 8% reduction in price
Sabrina,
You advise people who own units downtown not to sell. Does this include Streeterville, or are you just talking south of the river?
Wondering if it’s a good time to buy down there or if prices might fall further.
Thanks.
“You advise people who own units downtown not to sell. Does this include Streeterville, or are you just talking south of the river?”
“Downtown” runs all the way from North Avenue to Cermak.
Prices are depressed. Properties are selling but the buyers are getting some great deals.
If I didn’t HAVE to sell right now, I wouldn’t, but that’s just me as I’m not into losing money.
Because life happens, some sellers don’t have a choice.
“67 is NOT “literally nothing”. It’s not really even figuratively nothing, as it is about 2 months of sales.”
It’s NOTHING.
If you’re looking for that $500,000 townhouse, good luck. So, yeah, it’s NOTHING.
Looking at ALL the properties listed and acting like the buyers are looking at ALL the properties is just silly.
Not all properties are “the same” right?
Come on anon(tfo). You can do better.
Inventory is nothing in many neighborhoods. Look at Lauren’s complaint about townhouses. She gave us 2 examples for what she’s looking for for a huge swath of area (south of North Avenue to the South Loop but “near the lake”). Yeah- that’s “nothing.”
This is why there are multiple bids everywhere and properties selling above asking.
Similar to what has happened in the Bay Area for the last 25 years.
This is the power of low inventory.
“This is why there are multiple bids everywhere and properties selling above asking.”
Up until this year, in my immediate area, a “hot” house, or most houses during a particularly “hot” few-month period of listings/sales, would get $10-30k over list. Lately it has been like 10-30% over list (for example, a non-updated place that would have sold for $600k around 6 years ago and $800k a few years ago, with about $200k in updates made in the past year right before listing, listed for around $1.3 million a month ago and I think just sold for nearly $1.7). The $1.5 to $3 million SFH class seems to have about the most intense demand right now (seems like smaller (1500 sq ft) junky places (like ours), currently in the $800’s, are taking a few weeks to get under contract (but they are), and mega places (4k sq ft +) in the high 3s and above take 4 to 6 weeks to find a rich transplant (but they do), whereas updated 2500 sq ft places (late 1960s 4/2.5 houses) listed at around $1.5 and brand new 3,500 sq ft places listed at around $3 sell on the first day). It’s nuts.
“The $1.5 to $3 million SFH class seems to have about the most intense demand right now”
Isn’t that because that’s mostly the 2-income techies and legal/doctor professionals?
Anything priced lower, like $700,000 or $800,000 means the buyer is middle class but even with 3% mortgage rates, $800,000 is too much of a stretch for them.
There are fewer buyers at that lower level. They don’t have the down payment or income to buy.
I have a friend who lived in West Oakland from 2005-2008. She bought for $400,000 in 2005. Neighborhood really rough at that time.
It just sold for $1.3 million.
She couldn’t believe it. They did cosmetic upgrades and that was it.
Yep, it’s nuts. Glad I’m not out there. Chicago is bad enough with rising prices and competition.
“Isn’t that because that’s mostly the 2-income techies and legal/doctor professionals?”
Chicago is losing techies on net since Covid started per Bloomberg. 3rd most outbound migration behind San Fran and Boston.
Guess who is number 2 on the list on net inbound tech talent migration. Low and behold the city with “no jobs” per Sabrina Nashville.
Every tech company and start-up in the world knows and sees this data. Where do you think Tech companies will relocate to, expand, or set-up offices at over the next 10+ years? Look at this list. The experiment that occurred over the last year proved most of these tech workers and companies can continue expanding while working from anywhere.
Now the tech landscape employer/employee relationship leverage has shifted. The start-ups and large tech companies will realize they don’t have the power anymore to dictate were the talent goes i.e. San Fran, New York, Boston because that’s where the employer decided to set-up shop. In the new paradigm they finally have to go to where the tech worker wants to be.
If you are in the net inbound migration of tech workers cities you have a huge tailwind if these city leaders want it. The cities where there is a net outmigration of tech talent city leaders are behind the curve and if they don’t innovate (for some it could be too late) have alot of catching up to do which will only maintain their exiting position in the hierarchy or limit the loss.
https://www.chicagobusiness.com/technology/chicago-losing-tech-workers
“literally nothing”
Whatever. Make up whatever shit you like–you literally will anyway.
“Looking at ALL the properties listed and acting like the buyers are looking at ALL the properties is just silly.”
Then write “literally nothing good” or “literally nothing worth buying”, but NOT “literally nothing on the market”, which is as demonstrably false as your bullshit about hotel availability.
“even with 3% mortgage rates, $800,000 is too much of a stretch for them.”
That’s ~$4k/month, assuming $160k available from selling the starter place. $48k/yr, 28% front-end ratio, ~$175k HHI. Which (at the risk of going down that road here for the Nth time) ain’t “middle class”–it’s lower UMC. But it is 100% “affordable” on a $175k income, if you get the 20% DP somewhere.
“MC” housing in Chicago area should be topping out at ~$600k home prices, again assuming $120k equity available somehow.
Going to require a lot of inflation or permanent ZIRP for that to not go badly.
“Guess who is number 2 on the list on net inbound tech talent migration.”
That’s a ratio number, dependent on how many in the cohort were in the metro before the measuring period.
And includes people working in (eg) call centers for tech companies.
I started browsing real estate in Wilmette before the pandemic and kept browsing it throughout. I saw lots of houses just stagnating on the market priced under $550,000, especially before the pandemic.
Now, there is absolutely nothing. Sometimes a house that looks relatively nice will come on the market, but it’s gone immediately.
Here are a few examples of homes sold in the past year or so that I would have considered if I had been ready to sell before the vaccines became widely available:
https://www.estately.com/listings/info/1521-greenwood-avenue–2
https://www.estately.com/listings/info/1407-elmwood-avenue–5
https://www.estately.com/listings/info/1002-linden-avenue–5
In my own condo building, the condos priced appropriately are going under contract instantly. I see some stagnating, but the sellers of those places are asking much more than I think is a fair price. There are no units similar to mine even on the market at this point though. I talked to a realtor who said he had clients who would be interested in a place like mine and I felt a little pressed to put my place on the market.
I’m starting to hear about friends of friends who sold their place, but couldn’t find a place to buy, so they are staying with family or renting. At this point, it’s tempting to do the same. I actually still like my condo a lot, but I’m frustrated by some quality of life issues in my area (nearish to the west loop) and just want to escape someplace quiet. I also loathe my neighbors who couldn’t be bothered to wear masks for a 30-second elevator ride. I want to move someplace where the police actually come out when called and don’t just allow people to set off fireworks constantly. I’m tired of the constant, in-your-face corruption in Chicago. I’m not sure if I’m ready to give up city amenities yet and I’m not going to buy a house that’s overpriced.
That’s ~$4k/month, assuming $160k available from selling the starter place. $48k/yr, 28% front-end ratio, ~$175k HHI. Which (at the risk of going down that road here for the Nth time) ain’t “middle class”–it’s lower UMC. But it is 100% “affordable” on a $175k income, if you get the 20% DP somewhere.
Affordable in terms of solely working to own a $800k house? The hypothetical couple is pushing over 40% of take home into the home. I guess if you dont have kids, a vehicle, like vacations, or save for retirement, yeah its possible.
“The hypothetical couple is pushing over 40% of take home into the home.”
“affordability” ain’t measured from take home, but from gross.
28% of gross is “affordable”.
Anyway, the scare quotes were intentional.
“literally nothing”
funny you say that as I just noticed today that there are literally zero homes for sale in my immediate neighborhood… zero… within about a half mile radius… crazy
I rarely see anyone making $175k buying $800k homes. Yes, it is possible based on mortgage qualification standards but the reality is that you’d be “house poor”. Most of the borrowers I see buying $750-$1.5m places typically have household incomes of $350-$750k in my experience. I don’t think Chicago buyers stretch as much to get into a house as people do out on the West Coast.
“And includes people working in (eg) call centers for tech companies.”
I get Jacksonville and some other mid-tier cities likely have more call center jobs per capita than Chicago, New York, Boston, and San Fran but people aren’t uprooting their lives from a tier 1 city to Nashville/Austin/Jacksonville etc. for a call center job.
“people aren’t uprooting their lives from a tier 1 city to Nashville/Austin/Jacksonville etc. for a call center job.”
Where do you get the information that the people moving to Nashville/Austin/Jacksonville are coming from Tier 1 cities, based on those charts? Or is this another “seems reasonable to me” conclusion?
“That’s ~$4k/month, assuming $160k available from selling the starter place.”
anon(tfo) you clearly haven’t ever lived in the Bay Area.
The $800,000 house IS the starter home. There is no “$160k available from selling the starter place.”
Anything $800,000 and under is a first time home which is why it’s taking much longer to sell those. Those middle class people don’t have the firepower to buy at that level even with mortgage rates at 3%.
And it’s absurd to try and argue that it’s “affordable” for someone making $160,000 a year. This is how so many got into trouble in the housing bubble.
“Where do you get the information that the people….”
Where do you get the information that there’s a massive hiring binge of call centers workers at tech companies in these mid-tier cities….
“Then write “literally nothing good” or “literally nothing worth buying”, but NOT “literally nothing on the market”, which is as demonstrably false as your bullshit about hotel availability.”
There is NOTHING on the market. Absolutely nothing in many, many neighborhoods.
I cannot find a $500,000 townhouse in my favorite neighborhood. Therefore, there is NOTHING on the market. Absolutely nothing.
Do you not understand english anon(tfo)?
And why are you even arguing with me about this?
We can agree that inventory is at multi-year lows in Chicago. The data doesn’t lie.
That low inventory is pushing prices up all over the city and suburbs. In fact, the entire state.
“ I cannot find a $500,000 townhouse in my favorite neighborhood. Therefore, there is NOTHING on the market. Absolutely nothing.”
You are either as psychopathic narcissist or the dumbest person ever
“And why are you even arguing with me?”
Got to be a masochist. As you’re wrong 87.4 (repeating) % of the time. Yet continue to double down on stupid. Changing the meaning of words, creating strawmen, moving the goalposts, etc. on a whim, in order to make believe that you are “correct”
You must live one hell of a pathetic life…
“Where do you get the information that there’s a massive hiring binge of call centers workers at tech companies in these mid-tier cities….”
Did I say that? NO–I pointed out something from the notes on the charts–that it counts ALL employees of Software/IT firms–so it *includes* call center employees.
Jeebus, it’s like you’re Sabrina’s alter-ego.
“This is how so many got into trouble in the housing bubble.”
Can’t even read to the end of a 6 sentence comment?
“Going to require a lot of inflation or permanent ZIRP for that to not go badly.”
Jenny:
If you are in substantially the same life circumstances as you had presented here in the past, were I in your position, I would be leaning *hard* toward selling and renting for a couple years. Even if you’ve acquired a couple of tortoises.
‘Inventory’ is not low. There is a ton of home inventory. *AVAILABLE* inventory is low.
I don’t know why that distinction irks me so much but it does, please refer to it as AVAILABLE inventory. As if you look on your block there is a building every 25 feet, so there is inventory, but not all of those buildings every 25 feet are for sale, so not much available inventory.
got it? good! Now continue on.
@anon Similar life circumstances, but I bit the bullet and left the non-profit world for something that pays much better.
“I don’t know why that distinction irks me so much but it does, please refer to it as AVAILABLE inventory.”
Groove, we all know what we’re referring to when we use the word “inventory” on this site. No one thinks its EVERY house on the block. Inventory means “for sale” or “on the market.” THAT is the inventory.
“You must live one hell of a pathetic life…”
Nah, you do JohnnyU. You live in Indiana and come onto a Chicago housing blog to tell everyone that the city is doomed.
Talk about being nuts.
@BriBri
Yes I may have the most grammatical errors per sentence by a far margin on this site (and most of the al gore interwebs). But it is not inventory it is *available* inventory. Lazy realtors (which is 95% of them) just use inventory incorrectly.
Nah, you do JohnnyU. You live in Indiana and come onto a Chicago housing blog to tell everyone that the city is doomed.
Wrong
Wrong
wrong
Congrats on hitting the trifecta
Your inability to ever be correct is astounding
JU:
What’s the third wrong item in that quote? First two are easy (IN & doom).
Sabrina’s I’m rubber/you’re glue retort in regards to ones life
Just posted my May update: https://www.chicagonow.com/getting-real/2021/06/chicago-real-estate-market-update-home-sales-set-15-year-record-in-may/
It was a 15 year record for closings almost exclusively driven by condo sales again. Contract activity still strong and inventory tight as hell.
Thanks for posting the update Gary.
May seemed to be sizzling and your data confirms it.
The real surprise is the strength of condo/townhouses. Up 25% over 2019? Dang. People are still looking to buy whether in the city or the suburbs.
“The city is dead” argument should be put to bed now.
Another example of the sizzling hot housing market. It isn’t letting up yet.
This 3-bedroom Edgewater Glen single family home came on the market June 10 at $699,555.
Two days later, on June 12, they RAISED the price by $70,000 to $770,000.
The next day, they marked it as “contingent.”
3 days on the market and a $70,000 price increase. I’m assuming it got multiple offers the first day on the market. I’m not sure why they felt they needed to actually raise the price on the listing (appraisal reasons???).
It doesn’t even have a master suite. (lol)
Sold in 2002 for $424,500
Listed in June 2021 for $699,555
Price raised to $770,000
Under contract at $770,000
https://www.redfin.com/IL/Chicago/1323-W-Norwood-St-60660/home/13413691
Here’s another hot house. It’s not yet under contract. Listing says it’s in West Andersonville.
They put in a new kitchen and updated the baths. Also put a bathroom in the lower level. Has all of the trendy finishes.
Also doesn’t have a “master suite” as there’s just one bathroom on the second floor for all three bedrooms.
Listed at $825,000
Sold in August 2017 for $537,500
https://www.redfin.com/IL/Chicago/1775-W-Winnemac-Ave-60640/home/13403321
“Sold in 2002 for $424,500
Listed in June 2021 for $699,555
Price raised to $770,000
Under contract at $770,000“
The house in Edgewater Glen is really nice.
The current owners put a fair amount of coin into it.
You don’t know if it sold at $770k.
“Another example of the sizzling hot housing market. It isn’t letting up yet.”
Look at what they have in common. Renovated SFH on the northside and east of the river. Go 10 – 15 minutes south to Lakeview or Lincoln Park this same home is $1MM+.
This is about the housing dynamics in that area coupled with the pandemic realities of people valuing personal inside/outside space more than living closer to the city.
The value of owned space is worth more than the value of an area that the home is in today unlike a few years ago when someone would rather pay the same/similar amount to live in a unit of a 3 flat condo to be in walking distance of their favorite LP or LV restaurant and closer to work.
It’s why the suburbs housing market is “hotter” than the city.
“It doesn’t even have a master suite.”
I thought no place had a master suite anymore?
That’s a big space for a 2 + den.
“[1775 Winnemac]”
Well, that place was weird in ’17, which certainly depressed the price. Check out pic 9.