Market Conditions: January Sales Fall 19.4% YOY, the Most in 8 Years
The Illinois Association of Realtors is out with the January sales.
December was weak and, it turned out, the weakness extended into January even though “bad” winter weather wasn’t an issue as the weather was mild in both November and December, when January buyers would have been looking.
The city of Chicago saw year-over-year home sales decrease 19.4 percent with 1,164 sales in January, compared to 1,444 a year ago. The median price of a home in the city of Chicago in January was $252,000 down 4.9 percent compared to January 2018 when it was $265,000.
Sales Data Since 2006 (thanks to G for the older data):
- January 2006: 2009 sales and median price of $258,000
- January 2007: 1850 sales and median price of $279,900
- January 2008: 1203 sales and median price of $290,000
- January 2009: 918 sales and median price of $205,000
- January 2010: 1237 sales and median price of $195,000
- January 2011: 1034 sales and median price of $150,000
- January 2012: 1123 sales and median price of $149,000
- January 2013: 1521 sales and median price of $157,000
- January 2014: 1383 sales and median price of $200,750
- January 2015: 1348 sales and median price of $220,000
- January 2016: 1398 sales and median price of $227,750
- January 2017: 1574 sales and median price of $255,000
- January 2018: 1444 sales and median price of $265,000
- January 2019: 1164 sales and median price of $252,000
The real estate associations didn’t mince words, admitting that the housing market has slowed.
“Consumer confidence throughout the U.S. declined in December and January, due to the government shutdown, the slowing rate of job growth and overall uncertainty about the direction of the economy, resulting in declines in closed sales for January,” said Tommy Choi, president of the Chicago Association of REALTORS® and broker at Keller Williams Chicago – Lincoln Park. “Sellers responded by lowering prices slightly to incentivize cautious buyers, who are regaining some power. The slower market is not a cause for concern, as market changes are a natural part of the real estate cycle.”
Time it took to sell statewide was 62 days, down from 64 days a year ago.
The 30-year fixed rate mortgage remained elevated versus a year ago at 4.46% versus 4.03% in January 2018. However, that was lower than the average in December of 4.64%.
“The year-over-year decline in sales continued in both Illinois and Chicago, but this decline was matched by a small drop in prices,” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) at the University of Illinois. “This slippage in both sales and prices may signal the impact of declining consumer confidence and the effects of the government shutdown. REAL’s research indicates this could set the state up for additional price decreases in February and March.”
Was the government shutdown really a factor?
Did buyers have difficulty closing on loans because some government agencies were closed? Because, otherwise, most properties would have gone under contract well before the shutdown started.
Another thing of note:
Not only was this the lowest number of sales since 2012, which was the bottom of the housing bust, but it was the first time monthly median prices actually FELL, instead of rising, since 2012.
We’ve chattered about the problems looking at the median price in the past. That’s all about the mix of what is selling.
But it’s still a trend that should be watched as Hewings seems to believe the weak prices will continue into February and March.
Could January’s housing report be the first real sign that the Chicago housing market is slowing down?
Illinois home prices moderate in January; sales lower[Illinois Association of Realtors, Press Release, February 21, 2019]
I swear the IAR’s data is just wrong. I’ve pulled it from 4 different places (one of which is the CAR site) now and they all agree that Chicago January sales were around 1313 units, not 1164. Seriously. I shit you not.
I’m going to talk to the IAR today and find out what they did wrong.
1313 is still the lowest in six years, so the analysis doesn’t change much.
I wonder if the uncertainty around JB the Hutt and the mayorial clown show is making people have doubts?
and if gary’s numbers are correct thats still a 9% decline
Yeah, but 19.4% is a huge decline. And when you compare Feb 7 data to Feb 7 data from last year the decline is really only 7.1%.
“I wonder if the uncertainty around JB the Hutt and the mayorial clown show is making people have doubts?”
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Nobody gives a rat’s patootie about the aldermen. They are all corrupt clowns who know nothing about economics or finance or how to build a business case for something.
The mayoral race (they too are corrupt and just as ignorant) may have an effect on investors due to pushing for rent control, but home ownership? Nah. Owners only care about taxes and services, and none of the mayoral candidates have a break out plan on taxes up or down.
johnc, that’s why we need to reduce the number of Aldermen. They’re useless.
“johnc, that’s why we need to reduce the number of Aldermen. They’re useless.”
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Worse than useless, they’re dangerous. If Chicago had the same number of aldercritters per capita as New York City does, we’d have 15 of them. Reduce to that number, and we might get some intelligent people running the show, instead of the “My race is _____ and my religion is ______ and my ethnicity is ______, so vote for me” corrupt clowns we have now.
“I’m going to talk to the IAR today and find out what they did wrong.”
Please do Gary. Remember about 8 years ago when they DID mess up the data? Lol.
Stocks were down 20% in December. Now it was a short bear market but whose going to buy an illiquid asset when public markets are down a ton. If you are a buyer you want the pricing of public markets and if you are a seller you want to wait for things to stabilize. There are reit indexes that were up 20-25% in that time frame. Difficult to transact when it’s nearly impossible to price
You will notice that the IAR pulled down that release. I’m sure a new one will be issued with the correct numbers in it.
They posted a revised release. Their numbers are now closer to mine than what they would have originally reported because they are now pulling the numbers later in the month. So they’re showing a 7.4% decrease for Januaryu.
I just posted my February update and it wasn’t too bad. Sales were down only 4.6%, though the IAR will report a 7.4% decline. Inventories are low and market times are short so I still maintain it’s a supply limited market that is not suffering from weak demand. http://www.chicagonow.com/getting-real/2019/03/chicago-real-estate-market-update-5-year-low-in-home-sales/
“Inventories are low and market times are short so I still maintain it’s a supply limited market that is not suffering from weak demand.”
I have mixed feelings. Some things are selling instantly so there is clearly demand. But other properties are sitting and sitting and sitting. Depends on price and neighborhood, obviously. Also depends on if it has been updated or not.
We’re still in the same scenario as last year- that if you haven’t renovated/updated, the property will sit for quite a bit of time. And heaven forbid you overprice it.
But several properties I rushed out to get pictures of a few weeks ago, were under contract within 3-4 days of listing, so that’s a pretty hot market.