Market Conditions: June Sales Hottest Since the 2005 Boom as Condos Sell
The bull housing market just keeps charging along in Chicago as inventory remains tight and buyers are still in the market in decade high levels.
From the Illinois Association of Realtors:
In the city of Chicago, home sales (single-family and condominiums) in June 2021 totaled 3,767 homes sold, up 81.8 percent from June 2020 sales of 2,072 homes.
The median price of a home in Chicago in June 2021 was $351,500, up 6.8 percent compared to June 2020 when it was $329,000.
Reminder: that last June as the lowest June for sales in 9 years so year-over-year comparisons are going to be skewed.
Thanks to G for the historical sales data:
- June 1997: 1,817
- June 1998: 2,214
- June 1999: 2,435
- June 2000: 2,513
- June 2001: 2,451
- June 2002: 2,590
- June 2003: 2,891
- June 2004: 3,752
- June 2005: 3,850
- June 2006: 3,557
- June 2007: 3,127
- June 2008: 2282
- June 2009: 1981
- June 2010: 2526 (tax credit sales)
- June 2011: 1841
- June 2012: 2246
- June 2013: 2729
- June 2014: 2846
- June 2015: 3202
- June 2016: 3321
- June 2017: 3380
- June 2018: 3191
- June 2019: 2850
- June 2020: 2072
- June 2021: 3767
Here is the monthly median price data:
- June 2008: $309,945
- June 2009: $242,050
- June 2010: $234,250
- June 2011: $207,000
- June 2012: $216,700
- June 2013: $254,900
- June 2014: $275,000
- June 2015: $288,250
- June 2016: $299,900
- June 2017: $306,750
- June 2018: $314,900
- June 2019: $319,000
- June 2020: $329,000
- June 2021: $351,500
“Last month, we saw many trends continue to play out, including increased closed sales and median sales prices, but the decrease in inventory and days on market could be telling a new, interesting story,” said Nykea Pippion McGriff, president of the Chicago Association of REALTORS® and vice president of brokerage services at Coldwell Banker Realty. “Some first-time homebuyers are struggling to find a home in this market while move-up buyers may be more cognizant of their budgets because of the pandemic, potentially causing them to stay in their current home; this is straining inventory further and causing buyers to jump on well-priced homes, decreasing market time. If you are considering selling your home, now is the time to call your REALTOR®!”
Inventory remains tight.
Statewide inventory fell 37.6% to 28,289 from 45,321 properties.
In Chicago it only fell 6.3% to 8,226 from 8,779 home last year.
“While prices are forecast to continue to grow on both an annual and month-to-month basis in both Chicago and Illinois, the month-to-month sales are forecast to drop slightly reflecting the continued tightening of housing inventory,” said Geoffrey J.D. Hewings, emeritus director of the Regional Economics Applications Laboratory (REAL) at the University of Illinois. “Inventory supply declined to 1.7 months in Illinois and 1.5 months in Chicago – both half of the levels recorded one year ago.”
Condos remain red hot. They boosted the month again with 2560 condos selling versus 1207 single family homes.
The condo sales were up 97.1% year-over-year.
As you can see from the list above, June is normally one of the strongest months for closings of the year. The spring buyers close on properties during that month.
But this June was exceptionally hot.
The average 30-year mortgage rate remained low at 2.97%, up from 2.95% in May but down from 3.02% in June 2020.
Should developers seriously consider building more condos given the demand?
Summer housing market speeds up in June as prices rise and inventory thins [Illinois Association of Realtors, Press Release by Stephanie Sievers, July 22, 2021]
“Reminder: that last June as the lowest June for sales in 9 years so year-over-year comparisons are going to be skewed.”
True
“ The condo sales were up 97.1% year-over-year.”
WTF?!? Do you always have to shill?
“ Should developers seriously consider building more condos given the demand?”
The bigger ? Is why haven’t they already started?
“The median price of a home in Chicago in June 2021 was $351,500, up 6.8 percent compared to June 2020 when it was $329,000.”
Wasn’t April and May price increases ~8% – 10%? The Case Shiller Index 20 city average is mid-teens and Chicago is less than half… oie
“Should developers seriously consider building more condos given the demand?”
Where? Your position too much inventory in the city at the upper end with builders saying they can’t build condo units <$500K as its unprofitable.
So build new Condos for first time buyers in Oak Park, Bronzeville, Humboldt Park, South Shore, Evanston, Elmwood Park, Elgin, West burbs?
“Chicago seems like a great place to invest in real estate.”
–Words uttered by no one in 2021 outside of Crib Chatter.
““Chicago seems like a great place to invest in real estate.”
–Words uttered by no one in 2021 outside of Crib Chatter.”
To be fair, I think there’s 1 person that thinks that way
Which neighborhoods on the North Side have the best chance for healthy appreciation over the next 5 to 10 years? Seems like anybody who bought condos in East Avondale 5 years ago is doing a lot better than folks who bought condos in LP.
“June 2018: 3191
June 2019: 2850
June 2020: 2072
June 2021: 3767”
18+19 = 6041
20+21 = 5839
Seems like deceleration to me. Unless one subscribes to the view that a lot of what would have been June-20 sales got pushed back into the fall/winter.
“Which neighborhoods on the North Side have the best chance for healthy appreciation over the next 5 to 10 years?”
Which neighborhoods would your LP-living friends/acquaintances who did not grow up in the city say “why would you move *there*?” That’s the list to start with.
“Should developers seriously consider building more condos given the demand?”
Condo inventory is at the lower end of the range but it’s not super tight. I think it would be a mistake. SFH inventory much tighter and we could use more of those homes but it’s not like prices are skyrocketing either. Remember Chicago area home prices are rising at like the slowest rate in the nation.
Pay top dollar for construction materials to build condos, pay top dollar for construction labor shortages, and finish your project right as rates hike. What could go wrong?
“Which neighborhoods on the North Side have the best chance for healthy appreciation over the next 5 to 10 years? Seems like anybody who bought condos in East Avondale 5 years ago is doing a lot better than folks who bought condos in LP.”
North Side?
Forget that.
Bronzeville, Kenwood, Hyde Park, Woodlawn and South Shore is where I would look.
How hot is it?
History for this Lincoln Park 2/1. We’ve chattered about this building numerous times over the last 10 years.
https://www.redfin.com/IL/Chicago/2008-N-Clifton-Ave-60614/unit-3C/home/171838630
Sold in April 2019 for $405,000
Listed on June 17, 2021 for $420,000
Under contract by June 22
Closed on July 20, 2021 at $455,000
The sizzle continues.
If you have a condo that’s not downtown, now is a GREAT time to be selling.
I’d like to see a technical chart analyst plot G’s data and analyze it.
Obviously the long-term trend is up, and if we’ve reached the trend line extrapolated from 2004-2005, then can we expect a sharp rise (aka the vertical blow off top) and then a crash?
I think we’re btw Enthusiasm and Greed on the chart: https://pics.me.me/new-paradigm-valuation-denial-delusion-retum-to-nomal-greed-bull-32997474.png
“I think we’re btw Enthusiasm and Greed on the chart: https://pics.me.me/new-paradigm-valuation-denial-delusion-retum-to-nomal-greed-bull-32997474.png”
People just need a place to live. The pandemic has changed people’s plans. Nationwide. This is the biggest migration in the United States since after WWII when the GIs all came home at the same time.
You can’t even look at the “normal” asset class charts.
And combine it with the largest generation in US history buying homes and you have a really strong bull market.
CNBC just declared the end of the housing boom with this headline:
“Housing boom is over as new home sales fall to pandemic low”
https://www.cnbc.com/2021/07/26/housing-boom-is-over-as-new-home-sales-fall-to-pandemic-low.html
“CNBC just declared the end of the housing boom with this headline:”
And?
The home builders are intentionally holding sales off the market. All of them. Have been for several months. Nothing new here. Sherwin Williams ran out of exterior house paint a few weeks ago. They can’t get appliances. They were waiting for lumber prices to come down. They don’t want to grow backlogs further because buyers usually won’t wait more than 18 months and they don’t want the cancellations. In some markets, it’s hard to get the labor to build. They are having trouble getting the land in some markets as well.
If the red hot new home sales market slows, that’s good. The market is too hot. Affordability is a problem in some markets. When rates rise it will cool it.
But new home sales, which were out this morning, aren’t really a relevant indicator for the “housing boom” because there aren’t enough existing homes either so inventory remains tight. Existing sales a much bigger market.
Really, the national headlines aren’t relevant anyway. The boom may be over in Boise, for instance. But still remains hot in downtown Chicago.
And it’s all about demographics. Last I checked, peak Millennials were still getting married and forming families and will be for several more years. And last I checked, Baby Boomers were still retiring, downsizing, and moving to new towns. That should last for another 10 years, frankly.
chart
https://www.zerohedge.com/personal-finance/us-home-prices-have-never-risen-fast
Inflation will force their hand. The central planners…err bankers have been putting a floor under asset prices since 2008 by printing over 7 trillion dollars and buying MBS and treasuries with it. They are steadfast to not allow younger generations to climb out of the mountain of debt they find themselves in via any asset price declines: house prices must be maintained no matter what because it wouldn’t be fair to let anyone holding the bag who bought high in our new equity-based America instead of equality-based.
However inflation is the fly in the ointment. With high inflation politicians will be voted out of office along with the central bankers who have been perpetuating this inter-generational ponzi scheme.
I just posted my July update: https://www.chicagonow.com/getting-real/2021/08/chicago-real-estate-market-update-july-sales-3rd-highest-in-25-years/
Sales are still strong and inventory of SFHs pretty low. There are some signs of slowing however.
“I just posted my July update: https://www.chicagonow.com/getting-real/2021/08/chicago-real-estate-market-update-july-sales-3rd-highest-in-25-years/”
Thanks Gary.
Wow. Another crazy month of blockbuster sales. It felt like things were slowing a bit, but I guess not. I can’t believe how hot condos/townhouses are when there aren’t even dozens of new condo buildings selling new product like there was in the peak housing boom years. It tells you how incredibly hot it really is out there.
The bears got it wrong last year when the pandemic hit. They got the recovery wrong. And now they’re getting the “year after” wrong too.
That being said, I do expect it to cool this fall and into the winter, depending on what happens with mortgage rates. It seems like some seasonality is returning. The kids are going back to school (yay!).
But it remains a bull housing market. That inventory is way too low. Prices will continue to rise with that low inventory.