Market Conditions: Chicago Home Sales Slide Another 30%
The August home sales numbers for the City of Chicago are out and, once again, it’s not pretty.
From Crain’s:
In the city of Chicago, home sales fell 30.8% in August, to 2,022 from 2,923 in August 2007.
The median price in the city of Chicago was $295,750 in August, down 3% compared with $305,000 in August 2007.
Local Home Sales Down 30% in August [Crain’s Sep 24, 2008]
It’s amazing that median prices have held up as well as they have considering the freefall in volume. Are less people getting more house for the same amount of money?
In response to the article Steve Heitman said… http://www.youtube.com/watch?v=rSjK2Oqrgic
Homedelete,
As I’ve said in the past these median price numbers are worthless. If the mix shifts away from the low end then the median price goes up regardless of what is really happening to prices.
“As I’ve said in the past these median price numbers are worthless. If the mix shifts away from the low end then the median price goes up regardless of what is really happening to prices.”
…until the low end capitulates and then the median will overstate the declines like its doing in west coast.
2,022 sales is about as close to a real estate depression as you’re going to get. That’s 1000 less commissions, 1000 less appraisals, 1000 less mortgages, 1000 closing costs, etc.
than last year at this time. Ouch that hurts.
The price capitulation will come soon. People can only hold off selling “until the market comes back” for so long. Now that the summer buying season is over, it’s all downhill until the (possible) springtime bump.
“until the (possible) springtime bump”
There will almost certainly be a springtime bump. Just like the bump in SoCal sales this year. But the bump will make it *worse* for current owners.
So the employment numbers for Chicago metro are available now and they show 55,000 fewer jobs than last year.
Meanwhile, Lakeview and Lincoln Park continue to make Steve Heitman look like a genius. They defy all logic. Inventory is not building and properties that sell do so quickly. I have updated the charts here: http://lucidrealty.com/lincoln_park.htm#market
and on the Lakeview page – substitute lakeview for lincoln_park in above URL (can’t put two links in a comment without triggering spam filter).
I’ll be updating and adding other community charts over next few days.
I dont know if Steve H is a genius, I just wonder if these people are more liquid, have more traditional mortgages, so are in less “need” to sell there homes not that they are going to be any less underwater eventually
I know Steve H doesnt like to look back, but there was a time when Lakeview was full of mansions, then was a workingclass neighboorhood, then a ghetto…circle of life…
I think LP & LV have held up so well because they are like the Greenwich Village of the midwest. No other neighborhood in the midwestern US has the character they do.
Are they immune from a downturn? No. But remember before they start to decline we’re going to see a whole lot of marginal neighborhoods burn off first. Remember a whole lot of marginal neighborhoods were bid up during the boom and it will take awhile for the decline to work its way through the neighborhoods.
Yeah, I’ve always maintained that it’s like a contagion…when property down the road is cheap enough people start opting to buy down the road and ultimately it lowers the prices in the nicer neighborhoods. These neighborhoods have a lot of cachet that has protected them up until now but I believe it has to catch up sooner or later.
LP is immune? That’s shill-speak. Here are the historical number of September condo/TH sales in Lincoln Park:
1988 = 104
1989 = 111
1990 = 72
1991 = 93
1992 = 109
1993 = 128
1994 = 140
1995 = 141
1996 = 132
1997 = 149
1998 = 119
1999 = 116
2000 = 130
2001 = 111
2002 = 136
2003 = 170
2004 = 182
2005 = 213
2006 = 104
2007 = 124
2008 = 73
The median alo dropped 10% in September YOY, and 8.5% from August MOM. Not very telling, I know, but it is what the shills liked to push when instructing us that “real estate always goes up.”
How many pent-up sellers do you suppose there are? You know, the type that can afford to wait until the market comes back.
These numbers are a disaster if demand didn’t increase over the same time. But, as the shills here remind us, demand for the neighborhood has exploded over the last decade. All of those suburbanites, foreigners, immune rich people and new lawyers at major firms seem to be waiting for something…
I wonder what it will take to get things selling again? Oh, that’s simple: PRICE REDUCTIONS.
Yeah, I know but interestingly, while demand has dropped so has supply. People are in no hurry to move so it’s possible that in these communities the prices are supported unless people HAVE to move.
“…while demand has dropped so has supply.”
Gary,
Has supply dropped or have they just been pulled off the market as usually happens in Aug, Sept, Oct…?
You can’t move into a new house if you can’t sell your existing house…
Well, the number of listings is down and it’s down by a typical amount for this time of year. The number of months of inventory is essentially flat with last year. In other words, listings and closings are down proportionally. I consider the listings to be the supply. People are staying put so that is propping up prices in these communities.
New listings and closings are not down proportionately for LP condo/TH mkt.
Sep 2007 = 124 sales
Sep 2007 = 202 new listings
Sep 2008 = 73 sales
Sep 2008 = 181 new listings
YOY sales -41pct
YOY new listings -10pct
Well the way that months of supply is calculated is a bit more complicated than that. Agent Metrics uses the following technique, which makes sense:
MSI
Terradatum’s MSI calculation equals the number of properties For Sale (FS) during the month (that is, the property was Active at least one day during the month) minus the number of properties that went Under Contract (UC) during the month minus the number of properties that Expired (X) during the month, divided by the number or properties that went Under Contract (UC) during the month:
TD MSI = (FS – UC – X)/UC
By this measure the months supply is virtually unchanged from last year.
So what probably happened is that last year they had more properties that expired. One other thing. I’m looking at just 2-3 bedroom attached.