Market Conditions: Chicago Sales Rise 27.5% in June Year Over Year
We have the June 2010 data and sales continue to rebound from 2009’s dismal numbers. The median home price, however, once again fell.
From the Illinois Association of Realtors:
In the city of Chicago, June total home sales (single-family and condominiums) were up 27.5 percent to 2,526 sales compared to 1,981 homes sold in June 2009, the tenth consecutive month of year-over-year sales gains. The city of Chicago median price in June 2010 was $234,250, down 3.2 percent compared to $242,050 a year ago in June 2009.
“We see an increase in the number of units sold in June 2010 over the same period last year, increasing the year-to-date number of homes sold in Chicago by 41% for the first half of 2010 versus 2009,” said REALTOR® Genie Birch, president of the Chicago Association of REALTORS® and a broker associate with Koenig & Strey Real Living, Chicago. “We believe this is a positive indicator that Chicago’s housing market is stabilizing. Motivated buyers and sellers are working toward realistically closing deals at current market values.”
Comparing the last 3 years of June sales:
- June 2010: 2526
- June 2009: 1981
- June 2008: 2282
Remember, mortgage rates are at all time lows.
High unemployment appears to still be affecting purchases.
“Continued strong annual sales growth characterized the months of April, May and June in Illinois in the Chicago region,” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “Sales are forecast to remain positive in double digits in both markets through September. Once again price changes remain more stubborn with some slight upward movement in Illinois in July and August followed by little or no change in September; in the Chicago region, the changes continue to trend down in the 1 to 5 percent range.”
Adds Hewings: “The economy is certainly not helping the housing market; the loss of over 200,000 temporary census jobs overwhelmed the private sector gains of 83,000. The unemployment rate fell nationally to 9.5 percent (from 9.7 percent in May). Illinois’ seasonally adjusted unemployment rate followed the national decline, dropping -0.4 point to 10.4 percent in June.”
Illinois Home Sales Up 10 Months in a Row, Chicago Region a Full Year
Statewide Home Prices Stabilizing [Illinois Association of Realtors, Press Release, July 22, 2010]
so prices are “stabilizing” in chicago, which means still declining. yet prices in “illinois” had slight upward movement, seems misleading. i’m assuming he’s talking about central/southern illinois having some positive trends which wouldn’t really surprise me too much.
i would love to see these press releases month after month for the past 5 years, how long have prices been “stabilizing?”
Prices will not stabilize until the unemployment rate realistically (not from people leaving the labor market) starts to go down. In condo buildings, the distressed sales really hurt other owners in the building substantially from the standpoint of comp impact. Crazy to think that the sale of one 1 bedroom unit can impact 40 other 1 bedroom units in a large building.
I think it’s more than just unemployment. It’s also prices being too high for buyers reduced income. Buyers need to safely budget housing costs into their budget without the ability to tap the HELOC every few years and without access to credit cards to buy groceries. Buyers of the past paid way too large of a percentage of their income towards housing and then made up the difference with additional credit. After figuring higher taxes (both IL and federal), higher medical costs and somewhat higher utility bills and then reduced incomes, there’s a lot less room leftover for housing. Reduced interest rates helps a lot but it’s not enough.
In other news companies are posting record earnings… so employment numbers might improve over the next year or two
“crib” chatters I promise that this is my last of topic post.
Sonies on July 15th, 2010 at 1:06 pm ?this isn’t crib chatter, its “crib” chatter you fools!
Thanks to all CC’ers that weighed in on the “crib” last week. My wife came home with a Phil and Ted portable crib on Saturday. Now when our daughter wakes up in the middle of the night she ends up in that thing instead of our bed. It is amazing as she seems pretty happy in the new kid condo and falls right back to sleep!
Thank you Sabrina and fellow CC’ers as I am sleeping again! Who knew a real estate blog would improve my life. Ha ha!
lol at jp3!!!!!
‘In condo buildings, the distressed sales really hurt other owners in the building substantially from the standpoint of comp impact. Crazy to think that the sale of one 1 bedroom unit can impact 40 other 1 bedroom units in a large building.’
Yeah TS, it is crazy. When the condo thing first started in the early 70’s (I think it was actually here in Chicago), it was meant to be an affordable way to own a piece of property when a house or co-op was out of your reach, and a way for the building’s owner to make a ton of cash (ie; Mr. Rubloff). My sister in law rented in Sandburg in the early 70’s right when it was being converted to condos. She had the option to buy her one-bedroom in the $20K range – low assessments and tiny property taxes. It was affordable on her secretaries salary, as it was designed to be.
Fast forward to today when condo prices regularly exceed those of houses (where you actually own the entire structure and the land underneath you) – plus assessments, plus taxes, plus special assessments, on and on. I’m sure it’s good when sale prices are going up and up, but yeah, a few people with exotic loans can ruin it for the rest of the units: shared risk under the same roof. I never understood the notion of condo = expensive. It was never intended to be that way.
“It was never intended to be that way.”
Wrong, plenty condos are intended to be expensive. Equating 70s Chicago with Chicago 2010 is laughable. Cities change.
I think that all the empty nester condo owners in Millennium Park, Lincoln Park, River East, and River North would disagree with the idea that all condos should be affordable and not luxury developments. They were lured in by the idea of not having to maintain anything, getting the great views, and picking out luxury finishes that were not available in their boring family homes scattered across the city.
Sandburg used to be a relatively inexpensive place to live high turnover. My auntie bought a 3 bedroom (yes 3!) in Sandburg for $149,000 in 1996, resold it in 2001 for $265,000.00 and in 2006 it sold for $316,000!! No bubble here folks, nothing to see, keep moving along!
cool story bro
“Sandburg for $149,000 in 1996, resold it in 2001 for $265,000.00 and in 2006 it sold for $316,000!!”
When did the special for the exteriors hit and has was it paid in connection with one of those sales?
’96 was close to the mid-90s bottom. It would have sold for quite a bit more than the $149 in 87/88.
Some of those buildings (not specifically speaking about Sandburg Village) were filled with grandmas and other people that were original owners and were not turning them over that frequently. When the boom started they were way undervalued compared to the rest of the neighborhood. They indeed rose quickly at that time as they were quite a value.
Around 1998 had a 1 bd in east Lakeview. Based on my calculation it was going up 2% per month for about three years before it leveled off. I should have taken a (realtor) neighbor’s advice and bought five or six other units. they were cheap, easily rentable, and the building had a 24 hour maint. staff on call. As long as the tennant was paying rent they would have been easy to manage, Ahhhh hindsight!
‘Wrong, plenty condos are intended to be expensive.’
Maybe now, but that wasn’t the case when they were first conceived. Co-ops historically retained their value because the board could vet whomever wanted to buy into their corporation, not the case with condos. And not all co-ops are east LSD – there are plenty of small 3 flat co-ops in NY where owners can at least examine a potential buyer before they all live under the same roof.
‘Equating 70’s Chicago with Chicago 2010 is laughable.’
I don’t know how many condo owners are laughing today when the value of their ubiquitous 2 bedroom has been ruined by the upstairs neighbor(s) who gained admission to their building only because they knew how to hold a pen and sign their name… and ran. Basing EXPENSIVE housing today on an original 70’s model of affordability and ‘easy’ access, condos, is scary not funny.
Anon(tfo):
April 1992 WARRANTY DEED $120,000.00
December 1999 TRUSTEES DEED $166,000.00
Nice call, anon(tfo), nice call.
sorry, December 1989, not december 1999
“Maybe now, but that wasn’t the case when they were first conceived.”
Lake Point Tower, as well as Hancock was build in the late 60s. You could not live there for 20k.
Anyways, 20k in today’s money is about 112k, you can find 1 bedrooms for that.
“December 1989 TRUSTEES DEED $166,000.00”
Inflated by cpi to 2006 = $269,880
120 in ’92 = $172 in ’06 = $186 now
Could totally see those place (assuming mild updating, but no full-fledged major upgrades) selling for the low-200s again.
“Hancock was build in the late 60s”
“1973: The residential portion of this building converts from apartments to condominiums.”
Anyone know the pricing at the time of conversion?
‘Lake Point Tower, as well as Hancock was build in the late 60s. You could not live there for 20k.’
I don’t remember if they were originally co-ops or condos; if they were condos, they were one of the first of offer the ‘new way of buying’ a roof over your head. But at least you could count on the banks to do their jobs back then by financially vetting anyone who tried to take out a loan. Hell, when I took out a loan in ’88 it was 20% down, 2 years of W2s, personal references, Dun & Bradstreet, and a thank you note to the loan officer Allison, for all her hard work… all for the low low rate of 11.5%.
11.5% how the #*&@ could anyone afford anything back then?
Any bets how soon Blago’s home be up for sale and featured on CC?
“11.5% how the #*&@ could anyone afford anything back then? ”
You could buy a nice place for $200k. Which is about $2k/month.
“Any bets how soon Blago’s home be up for sale and featured on CC?”
If I was rich I would buy it and bribe the alderman to get the zoning committee to let me build a Blago monument in the front yard. I’d have various quotes from Blago, both from the tapes and after his arrest on his media tour, inscribed in stone. Even Blago’s lawyer’s statement that he was going to testify at his own trial.
I bet Blago’s bro walks or gets little time. I bet Blago don’t.
““Maybe now, but that wasn’t the case when they were first conceived.”
Lake Point Tower, as well as Hancock was build in the late 60s. You could not live there for 20k.
Anyways, 20k in today’s money is about 112k, you can find 1 bedrooms for that.”
I’ve written before about the good Crain’s article from 2006 about the condo “bloodbath” of the early 1980s in Chicago- when prices fell 50% due to a mania in the 1970s and overdevelopment.
In the article it describes one buyer paying $44,000 for a 1-bedroom in the Hancock, circa 1976, and then flipping it and moving up into a 2-bedroom for $87,000- also in the Hancock.
Conceivably, then, it’s possible that 1-bedrooms sold for around $20k in the Hancock originally.
Here’s the complete article- on a PDF from Appraisal Research:
http://www.appraisalresearch.com/news/pressquotes/440.pdf
“I’ve written before about the good Crain’s article from 2006 about the condo “bloodbath” of the early 1980s in Chicago- when prices fell 50% due to a mania in the 1970s and overdevelopment.”
I’m already seeing some condos and even a couple of townhomes in the south loop go for 50% off.
“In the article it describes one buyer paying $44,000 for a 1-bedroom in the Hancock, circa 1976, and then flipping it and moving up into a 2-bedroom for $87,000- also in the Hancock.
Conceivably, then, it’s possible that 1-bedrooms sold for around $20k in the Hancock originally.”
$44k in ’76 deflated to ’73 = $34k (8.97%/yr). Doubt the initial sales price was *that* much lower, but would not be surprised by it being under $30k