Market Conditions: Chicago October Home Sales At 5 Year Low
We’ve already been chattering about how slow the fall has been in Chicago real estate.
The official October sales numbers are now out from the Illinois Association of Realtors and sales fell to a 5 year low:
The city of Chicago saw an 8.8 percent year-over-year home sales decrease in October 2016 with 1,981 sales, down from 2,173 in October 2015. The median price of a home in the city of Chicago in October 2016 was $262,000, up 9.2 percent compared to October 2015 when it was $240,000.
Thanks to G for all the data on October sales going back to 1997:
October Chicago sfh/condo/th sales and median
- 1997 1,731 $129,900
- 1998 1,855 $138,000
- 1999 1,978 $159,500
- 2000 2,106 $174,710
- 2001 2,177 $200,000
- 2002 2,503 $215,000
- 2003 2,996 $236,000
- 2004 2,651 $241,000
- 2005 2,846 $268,500
- 2006 2,630 $278,000
- 2007 2,007 $285,000
- 2008 1,564 $261,000
- 2009 2,068 $215,000
- 2010 1,225 $183,000
- 2011 1,324 $162,000 (44% short/REO sales)
- 2012 2,009 $175,000
- 2013: 2,231 $218,500
- 2014: 2,128 $236,000
- 2015: 2,173 $240,000
- 2016: 1,981 $262,000
“Although the autumn market’s pace is reduced compared to the summer months, great opportunities to buy and sell property remain,” said Matt Silver, president of the Chicago Association of REALTORS® and partner at Urban Real Estate. “As long as the low inventory continues, strategically priced properties will continue to fly off the market at higher prices.”
“No doubt that the election contributed to a decline in sales, but prices continue to grow,” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois. “For the next three months, price growth is anticipated to be a little stronger. Declining supply contributes some uncertainty to sales growth.”
Mortgage rates in October averaged 3.47% for the 30-year fixed, down from 3.78% in October 2015. So mortgage rates were not an issue in the slowdown in sales.
Statewide, sales also declined. The IAR blamed it on tight inventory which dropped 14.7% year over year. Average time on the market statewide dropped to 60 days from 69 days.
Nationwide, October existing home sales were the opposite of what happened in Illinois. They were the highest in 9 years.
What is keeping sales down in Chicago?
Was it really uncertainty over the election?
Illinois home prices show solid gains in October; Sales decline [Illinois Association of Realtors, Press Release, November 22, 2016]
Pending home sales were up so homes went under contract that just haven’t closed yet. Also, the fact that market times are down lends credence to the low inventory story.
This seems like a familiar pattern: price plateau, followed by a drop in sales, and then a crash in both.
I’ve been looking for a home since early summer – Being a chicagoan I refused to believe that the prices places were selling for were realistic. My realtor ( and others ) told me i’d get ‘priced out’, that ‘this was the new norm’, and my all time favorite,
‘Chicago has been cheap for too long, it’s just finally catching up to new york and LA’
I understand than inflation, a decent sized population of high earning young people, and a low inventory ( for how long though? ) has contributed to price increases, but I also refused to believe that the crazy prices we saw in the summer were sustainable. I’d seen it before when the bubble popped in 2007 – and although the reasons for this bubble may be different, it very much feels like one.
Keep in mind that it’s not one market. I think the “overpriced” narrative is accurate for certain segments of the market where we see inventory skyrocketing and sellers reaching. But for the “average” home or homes in hot neighborhoods where the inventory is still low and market times are shrinking I don’t think that narrative is correct.
” But for the “average” home or homes in hot neighborhoods where the inventory is still low and market times are shrinking I don’t think that narrative is correct.”
I disagree with this. I see homes in no name northwest side neighborhoods selling for $275,000 and short sales in far lake county going for top dollar. I hear anecdotally that the large, unrenovated homes with high taxes in the far suburban areas are hurting, but nearly everything in “average” areas that can be purchased using a large tax refund as a down payment is hot and sells quickly, as long as it appraises out.
Actually, sorry GAry, I misread your post! I thought you meant average neighborhoods, not average homes in hot neighborhoods!
Well, I was talking about the average home across the board – for instance the condos that comprise the 3.2 months of inventory and sell in 69 days.
“But for the “average” home or homes in hot neighborhoods where the inventory is still low and market times are shrinking I don’t think that narrative is correct.”
I can agree with that. I definitely think the ‘luxury’ market ( properties over 1 million ) is looking a lot more stagnant than summer.
I’ve noticed that 2/2’s in river north, west loop, lincoln park, etc have been selling pretty quick when priced in the 400’s. I still see a LOT of overpriced units in this range though…I mean – this unit has been for sale across the street from me. Who the heck is going to pay 600k for a 1200 sq foot 2/2 in an incredibly average building in a so-so part of near north/river north?
https://www.urbanrealestate.com/property/340-W-Superior-Unit-1401-CHICAGO-IL-60610-BN2FFANZX4YCK.html
I feel like places like that were selling pretty easy in the summer, and I was dumbfounded.
Interest rates and mortgage rates have risen since October. It’s going to get worse. I think we’ve peaked.
“Keep in mind that it’s not one market. I think the “overpriced” narrative is accurate for certain segments of the market where we see inventory skyrocketing and sellers reaching.”
Where is the inventory skyrocketing?
The upper bracket?
Condos or single family homes? Or both?
Single family homes in North Center, Lake View, Lincoln Square, Uptown, Lincoln Park
It’s even starting to rise in West Town a bit.
Near North Side never got that low.
340 W Superior: That’s the saddest looking $575k 2/2 I’ve seen in a while. I bet the place is 1,200 sq feet only if you include the balcony. And that’s the saddest looking dining room table set I’ve seen in a while. Probably because a slightly larger table wouldn’t fit. And the 11×9 bedroom is so puny, the room barely fits a full sided bed! And the price is outrageous, what is this, LA or something?
re: 340 W Superior
The assessments are $713 per month. Ugh.
Just posted my monthly update and in contrast to the October story the November story is just the opposite…highest sales in 7 years. There are a few caveats to that and December could be another disappointment. Really, when you look at the big picture sales have really plateaued. http://www.chicagonow.com/getting-real/2016/12/chicago-real-estate-market-update-highest-november-sales-in-7-years/
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