Market Conditions: Chicago Sales Plunge 18.9% in March on 16-Year Low in Inventory
The IAR is out with March data. The Chicago market still remains unbalanced. Inventory is at another low going back to 2008. As a result, sales fell again.
The city of Chicago saw an 18.9 percent year-over-year home sales decrease in March 2024 with 1,790 sales, down from 2,208 the year before. The median price of a home in the city of Chicago in March 2024 was $359,000, up 7.3 percent from March 2023 when it was $334,450.
Historic data courtesy of G:
City of Chicago condo/TH/SFH closed totals March
year/closed/median/% REO-Short Sales
Year Closed Median %REO/SS
1997 1,226 $126,875
1998 1,540 $137,003
1999 1,766 $152,125
2000 1,793 $167,500
2001 1,800 $195,000
2002 2,112 $210,000
2003 2,261 $225,000
2004 2,772 $244,950
2005 2,822 $271,125
2006 3,000 $275,862
2007 2,399 $285,000
2008 2,098 $300,000
2009 1,219 $217,000 37%
2010 1,860 $207,750 38%
2011 1,481 $163,763 49%
2012 1,630 $170,500 44%
2013 1,894 $187,500
2014 1,875 $235,000
2015 2,173 $260,000
2016 2,149 $269,000
2017 2,546 $295,000
2018 2,343 $310,500
2019 2,062 $290,700
2020 2,123 $319,950
2021 2,937 $345,000
2022 2,883 $345,000
2023 2,208 $334,450
2024 1,790 $359,000
Just a reminder that March 2021 was a new high in sales since 2006. But March sales are now looking more like the housing bust years of 2009-2012 but without the foreclosures and short sales.
“This March, closed sales dipped, though median sales price increased and days on market shortened – this is evident of a busy spring season in Chicago amid a pinched inventory market,” said Drussy Hernandez, president of the Chicago Association of REALTORS® and vice president of brokerage services for Coldwell Banker Realty in Chicago.
Inventory is low in Chicago, and statewide.
Statewide inventory fell another 14.2% to 15,268 from 17,795 last year. Median price, statewide, was up 9.5% to $282,000 from $257,000.
“The number of sales rose significantly from February to March in both Illinois and the Chicago PMSA,” said Dr. Daniel McMillen, Professor of Real Estate and Associate Dean for Faculty Affairs at the University of Illinois-Chicago College of Business Administration.
“Prices also increased. However, the number of sales is lower than at this time last year. Consumer confidence has been high for several months now, and sales traditionally increase significantly in spring. The number of sales and prices should continue to increase steadily over the next several months.”
Inventory in Chicago fell 16.4%. Here’s what it looked like the last three years.
- March 2022: 6506
- March 2023: 5044
- March 2024: 4216
The average thirty year fixed rate mortgage was up month-over-month in March to 6.82% from 6.78% in February. It was also higher than March 2023 when it was 6.54%.
When will inventory finally hit bottom?
And will that bottom provide a boost to home sales?
Shrinking inventory again stymies Illinois home sales, this time during March [Illinois Association of Realtors, Press Release, by Stephanie Sievers, April 19, 2024]
“ When will inventory finally hit bottom?
And will that bottom provide a boost to home sales?”
10 years or rates hitting 4.5%, which ever comes first
“Prices also increased. However, the number of sales is lower than at this time last year. Consumer confidence has been high for several months now, and sales traditionally increase significantly in spring. The number of sales and prices should continue to increase steadily over the next several months.”
Lies and unable to do math
“Lies and unable to do math”
The prices literally increased. How is that even arguable? Chicago metro up 10.3% YoY Feb 23-24: https://www.chicagobusiness.com/residential-real-estate/chicago-area-home-prices-double-digit-price-increases
Seems like buyers and investors are adjusting to higher mortgage rates and unless they start climbing over 8% I don’t see much changing.
This all checks out with what I’m seeing particularly on the northwest side. It’s not crazy like the West Loop but prices are steadily increasing. 2-4 units seem to be getting good traction as rents have increased significantly (~20% median increase YoY!). A 3bd in my hood used to rent for 1400 pre-covid now they’re going for $1800-$1900+.
There are 6 major construction projects going on just on my block in Jefferson Park (1 new construction, 2 flips, 1 total gut, 1 addition, and 1 mortar repointing). I’ve never seen anything like this. Great time to be in the dumpster rental business! The new construction has already pre-sold for August delivery.
NIMBYs & spineless alderman blocking multifamily development in residential-heavy zoned neighborhoods will only sphincter off future supply and drive up land values more. Then you have thousands of migrants that are going to end up settling here, putting even more pressure on naturally affordable housing.
Longer term, Chicago and the midwest are primed to capitalize in the coming years as insurance rates and climate migration drive people out of the south and west. Nothing goes up forever but the market tailwinds are undeniable.
Consumer Confidence isn’t high outside of the upper end
What’s the driver to increase sales? Barring Chicago becoming the next Austin there isn’t one. No one is willingly giving up a 3% rate to go to +7%. We had looked at moving and just couldn’t make the math work. Others that I know are going with extensive reno’s /additions vs moving.
First time buyers are f’d. and the owners of 2/2 shitboxs especially as it’s going to be a battle to compete with new construction and (likely) artificially low HOAs.
Midwest yes, Chicago no
“What’s the driver to increase sales?”
You can’t increase sales without inventory. It’s as simple as that. How do we get inventory? Builders need to build more. There are no new condo buildings going up in downtown Chicago right now for the first time in 20 years. And what is on the market in completed buildings, is mostly luxury ($1 million and up).
I’m waiting for one of the apartment buildings in Fulton Market to go condo. They are building 50 story apartment buildings there but not everyone wants to live in an apartment building. Will be interesting to see what happens when they do the first conversion.
“First time buyers are f’d. and the owners of 2/2 shitboxs especially as it’s going to be a battle to compete with new construction and (likely) artificially low HOAs.”
According to NAR, 32% of buyers in March were first time buyers. And NAR’s data showed it averaged 32% in 2023 as well.
https://www.nar.realtor/newsroom/existing-home-sales-descended-4-3-in-march
I don’t see how the owners of “2/2 shitboxs” will have to compete with new construction when there is no new construction of cheaper 2/2s in all of downtown Chicago (The Reed is the closest we have and it’s about $700,000+ for the 2/2s).
“Longer term, Chicago and the midwest are primed to capitalize in the coming years as insurance rates and climate migration drive people out of the south and west. Nothing goes up forever but the market tailwinds are undeniable.”
Agreed. And affordability. Midwest is still affordable.
“Lies and unable to do math”
This is peak selling season in Chicago. Usually see more sales but inventory remains at record lows and properties go under contract within a week. I don’t see this changing unless rates were much, much higher. Maybe at 9% there would be an inventory build.
On a separate note, Florida is seeing a surge in inventory. Wonder why? They all own it outright so mortgage rates don’t matter? Where are they all moving to if selling in Florida?
“You can’t increase sales without inventory. It’s as simple as that. How do we get inventory? Builders need to build more. There are no new condo buildings going up in downtown Chicago right now for the first time in 20 years. And what is on the market in completed buildings, is mostly luxury ($1 million and up).”
So if rates dropped to 3% you wouldnt see inventory come on the market
God you are an idiot
“According to NAR, 32% of buyers in March were first time buyers. And NAR’s data showed it averaged 32% in 2023 as well.
https://www.nar.realtor/newsroom/existing-home-sales-descended-4-3-in-march”
So what? This is your typical move to respond to a question never asked and claim vICtoRy
“I don’t see how the owners of “2/2 shitboxs” will have to compete with new construction when there is no new construction of cheaper 2/2s in all of downtown Chicago (The Reed is the closest we have and it’s about $700,000+ for the 2/2s).”
What else will the owners of the 2/2 shitbox have to compete with? I’ll hang up and listen
“This is peak selling season in Chicago. Usually see more sales but inventory remains at record lows and properties go under contract within a week. I don’t see this changing unless rates were much, much higher. Maybe at 9% there would be an inventory build.”
There will be even less inventory at 9%. I’m amazed that you can be this dumb and manage a blog.
I get that math is hard, but take a look at impact on HMAM at 3% Vs 9%
Also to call you out on your unending stream of bullshit, rates shouldnt matter because everyone in Chicago is getting 50% raises and making $100k a couple of years out of college, right?
“On a separate note, Florida is seeing a surge in inventory. Wonder why? They all own it outright so mortgage rates don’t matter? Where are they all moving to if selling in Florida?”
Speculation and Hurricane insurance
“There will be even less inventory at 9%. I’m amazed that you can be this dumb and manage a blog.”
Not necessarily. Sales will slow as buyers move to the sidelines. Inventory should build, as it’s doing with 7.5% rates in most other parts of the country. Chicago, and Illinois, are one of the few places where inventory isn’t building at all with rates at these levels. It’s actually still on the decline (hard to believe.)
“Speculation and Hurricane insurance”
They still have to be moving somewhere. Not all of that inventory is from investors. Are they fleeing Florida to be half backs? If so, inventory shouldn’t be on the rise in places like the Carolinas, but it is.
“What else will the owners of the 2/2 shitbox have to compete with? I’ll hang up and listen”
They don’t have to compete with new construction. There is none. Only competition is other, older units and rentals. Rentals cost more, even with higher rates, so that’s not competition either.
Prices will rise for the basic 2/2s downtown. In the neighborhoods, they already have. $500k+ is common for a 2/2 in the neighborhoods now.
There are only 48 2/2s under $500k in River North right now. Inventory is LOW.
“So if rates dropped to 3% you wouldnt see inventory come on the market”
Rates aren’t going to drop to 3% in the near term.
And even if rates DID drop to 3%, there are plenty of buyers with their big new salaries. Market would be even hotter, keeping inventory low. See the Bay Area for what that is like.
“Not necessarily. Sales will slow as buyers move to the sidelines. Inventory should build, as it’s doing with 7.5% rates in most other parts of the country. Chicago, and Illinois, are one of the few places where inventory isn’t building at all with rates at these levels. It’s actually still on the decline (hard to believe.)”
Other than a 08 scenario, yes necessarily.
Chicago didnt have any where the same speculation level as a Tampa for example.
Again – do the math on the HMAM someone can afford at 3% Vs 9% and get back to me
“They don’t have to compete with new construction. There is none. Only competition is other, older units and rentals. Rentals cost more, even with higher rates, so that’s not competition either.”
Are you really trying to say I cant rent a 2/2 for less than $4500/mo?
“Prices will rise for the basic 2/2s downtown. In the neighborhoods, they already have. $500k+ is common for a 2/2 in the neighborhoods now.”
Maybe they rise for downtown, maybe they dont
Show me an Invesco level 2/2, that hasnt had $100k thrown into it thats selling for $500k
“There are only 48 2/2s under $500k in River North right now. Inventory is LOW.”
In other breaking news, water is wet
“Rates aren’t going to drop to 3% in the near term.”
Non-responsive answer (again)
What rocker surgeon stated “You can’t increase sales without inventory. It’s as simple as that.”
“And even if rates DID drop to 3%, there are plenty of buyers with their big new salaries. Market would be even hotter, keeping inventory low. See the Bay Area for what that is like.””
No it wont. And yet another very bad N=1 comparison
Let me know if you lack the skill/intelligence/sobriety to understand how/why current homeowners with a 3% mortgage are unwilling to sell, even though they may have significant appreciation on their current property
“No it wont. And yet another very bad N=1 comparison”
Yes, it will. Properties become even more affordable at 3% and more buyers will jump in. A 2/2 condo will be much cheaper at 3% than a 2/2 new construction apartment. The 35-year olds WILL want to buy. There won’t be any inventory. See San Francisco for an example (as I said).
For some reason, people in Florida and Texas are willing to give up their 3% mortgage. Inventory is near 2019 levels in both of those states. Go figure.
Not sure why Illinoisans are so desperate to hold onto their properties when people living in most of the south are not.
“Let me know if you lack the skill/intelligence/sobriety to understand how/why current homeowners with a 3% mortgage are unwilling to sell, even though they may have significant appreciation on their current property”
You tell me JohnnyU. You apparently know why so many people are selling in Texas and Florida. Why IS that? They ARE willing to give up their 3% mortgages (if they have one.)
You’d think it would be the other way around with Illinois back to 2019 inventory levels, not Texas and Florida. Because supposedly people are fleeing Illinois. They are Baby Boomers and they have already paid off their house. They would want to sell and move to Texas, Florida or Arizona for retirement. No mortgage to worry about. But, again, that ISN’T happening. Illinois inventory remains near multi-decade lows. Not only that, it continues to move lower. It hasn’t bottomed yet.
Why are all the Baby Boomers selling right now in Florida and Texas? They don’t have mortgages down there either or they’re at 3%.
“In other breaking news, water is wet”
But you just argued that those owning the basic 2/2 “shitboxs” are screwed. Don’t seem screwed to me, JohnnyU. Seems like they’re in the driver’s seat for the first time since 2006.
“Are you really trying to say I cant rent a 2/2 for less than $4500/mo?”
New construction? No. Old and not updated- sure.
Get into this decade JohnnyU. Watch some Chicago apartment TikToks.
“Show me an Invesco level 2/2, that hasnt had $100k thrown into it thats selling for $500k”
You DO realize that Invesco converted many buildings as long ago as 25 years now. I should hope that they HAVE updated whatever was going on with it in the 1990s. No matter WHAT the condo. Hell, most people have to update every 10 years now.
The neighborhoods sell for $500k now JohnnyU. The old “400k 2/2” is a thing of the past outside of downtown.
“Chicago didnt have any where the same speculation level as a Tampa for example.”
The ENTIRE state of Florida had speculation?
“Again – do the math on the HMAM someone can afford at 3% Vs 9% and get back to me”
As I first argued 2 years ago, and which is actually playing out right now, the buyer of the $750k condo moves down to the $500k condo etc. etc. The actual rate doesn’t matter. It’s the monthly payment. It has ALWAYS been the monthly payment. They do NOT buy the same property.
Whatever is allowed in their budget is what they will buy. Those looking right now at $500k have no conception that 3 years ago they could “afford” $750k.
But this is why the lower priced properties have more competition. Lots more buyers at the lower levels. Multiple bids.