Market Conditions: March Sales Fall 3.7% YOY As Inventory Falls Another 28.7%
The Illinois Association of Realtors is out with the March data. As we already know from Gary’s data, March sales did finally show a year-over-year decline, but last March was the hottest March of the last 25 years with the exception of 2006.
That means March 2022 was the third hottest March since 1997.
From the IAR:
In Chicago, home sales (single-family and condominiums) in March 2022 totaled 2,827 homes sold, down 3.7 percent from March 2021 sales of 2,937 homes.
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 2,827 $345,000
“Despite ongoing inventory shortages, median sales prices held steady in March compared to the same time last year, which is at odds with the ongoing conversations regarding sales price increases,” said Antje Gehrken, president of the Chicago Association of REALTORS® and president and designated managing broker of A.R.E. Partners. “This is a sign of a healthy, steady Chicago market, with opportunities for both homebuyers and sellers in our city.”
In the sales mix, single family homes continue to be in strong demand. Condo sales fell 5.5% year-over-year to 1890 while single family homes were up 0.1% to 937.
Inventory continues to plunge.
Statewide inventory fell 32.1%. Here’s the last three years in March:
- 2020: 49,946
- 2021: 26,564
- 2022: 18,027
In Chicago, inventory also sunk 28.7% year-over-year. Here’s the last three years in Chicago:
- 2020: 8,521
- 2021: 7,404
- 2022: 5,829
In Chicago, days on the market fell 13.3% to 39 from 45.
The 30-year fixed mortgage rate is now on the rise. In March it averaged 4.17% up from 3.76% in February and also up from 3.08% last March.
“With mortgage interest rates inching up and fewer homes for sale than previous years, buyers are seizing opportunities rather than shopping around,” said Ezekiel “Zeke” Morris, president of Illinois REALTORS® and designated managing broker of EXIT Strategy Realty/EMA Management on the South Side of Chicago.
Will the dramatic rise in mortgage rates over the last 45 days light a fire under buyers this spring?
Could we see a record number of sales in April as buyers rush to close?
Sellers enjoy advantage in March as Illinois homes spend fewer days on the market [Illinois Association of Realtors Press Release, by Bill Kozar, April 20, 2022]
“ Will the dramatic rise in mortgage rates over the last 45 days light a fire under buyers this spring?”
Why would it light a fire?
The 2 flat you posted dropped $50k and the monthly nut went up. There’s going to be a disconnect between comps based upon 3% mortgage rates and HMAM at +5%. Throw in people having a few months of higher fuel, utilities, food, etc bills.
This should be a good test on your pet theory regarding the acceptability of the South side to UMC’s
Chicago inventory only dropped 21% not 28%. Statewide inventory continuing to deplete at a much faster clip than the city.
“In Chicago, inventory also sunk 28.7% year-over-year. Here’s the last three years in Chicago:
2020: 8,521
2021: 7,404
2022: 5,829”
Where did that come from?
Clicking thru the linked IAR report shows the 5,829 for 2022, but has Mar-21 at 8,170. Which then matches the reported 28% decline.
HAWT
meanwhile the rest of the US is up 10.6% according to FRED
https://fred.stlouisfed.org/series/MSPNHSUS
gee I wonder what could be keeping prices down in this super duper desirable city
From Crain’s:
“In the first three months of the year, according to CAR, Chicago houses sold in an average of 61 days on the market. Condos sold in an average of 99 days.”
Also from Crain’s:
“Chicago Association of Realtors data released April 14 shows that the median price of attached homes sold in the city in March was down 2.3%, to $356,500. In the same month, the median price of houses grew by 2.5%, to $323,000.”
“Chicago Association of Realtors data released April 14 shows that the median price of attached homes sold in the city in March was down 2.3%, to $356,500. In the same month, the median price of houses grew by 2.5%, to $323,000.”
And?
It’s median. Who cares? It just means fewer $2 million+ condos were closing in the St Regis that month. When One Chicago starts closings, it will probably go up that month. A 100 closings in these new buildings really can move the needle.
“It’s median. Who cares?”
Apparently, whoever wrote the post above does:
“Year Closed Median”
If it doesn’t matter, then it’s not worth noting, right?
“If it doesn’t matter, then it’s not worth noting, right?”
I have included it every year I have wrote this blog. No one said it wasn’t worth “noting” as it’s the only price data we have. But we all KNOW, as you KNOW, that it’s median and determined by the mix.
You cannot use it to say “this is the price” in Chicago. And I never have on this blog.
But you have been around this blog for far too many years anon(tfo). You know why I list it.
Shameful.
2020: 8,521
2021: 7,404
2022: 5,829”
Where did that come from?
These numbers are from the data the last 3 years from IAR per this blog. You can look at the posts from the prior years. Could be that they “revised” the inventory number from last year in the next year. This happens with the sales numbers so it wouldn’t surprise me that they do it with the inventory numbers.
“Chicago inventory only dropped 21% not 28%. Statewide inventory continuing to deplete at a much faster clip than the city.”
It’s 28% according to IAR’s current report.
So now we’re going to compare statewide, at 32% and Chicago and say Chicago at 28% is somehow “bad”? Lol.
Until the last few months, Chicago inventory had hardly fallen at all even though the statewide inventory was down 50%. It’s now playing catch-up. Downtown needs less inventory. There’s still too much in some neighborhoods downtown. Some buildings also have much more than others. There’s still too many luxury units and not enough entry level or mid-range ($500,000 to $700,000).
It’s tightening downtown though. Prices will rise as they have out in the neighborhoods which have little inventory.
I can’t believe the Chicago market is remaining this hot for this long. It’s been 16 months.
“Why would it light a fire?”
If they don’t buy now, with the lower locked in rate, their payment could go up hundreds of dollars a month. Who wants to spend more?
Agents are reporting that there has been a buying surge in the last few weeks as buyers want to get in before rates are 5.5% or 6%. I’m expecting April, and maybe even May, to be quite strong as a result.
It’s shocking to see Chicago inventory under 6,000 properties. This is peak spring selling season. Where are the listings? Or are the listings selling nearly immediately when listed?
I was going to crib on this River North penthouse for tomorrow. But it went under contract in just 2 days.
Lol.
Sizzle.
https://www.redfin.com/IL/Chicago/635-N-Dearborn-St-60654/unit-2701/home/12673568
I thought RN wasn’t HAWT(tm)
Remodel looks pretty well done. Might break even after all is said and done
“ If they don’t buy now, with the lower locked in rate, their payment could go up hundreds of dollars a month. Who wants to spend more?”
They’re already having to spend more. I guess those money trees are in bloom…
“Agents are reporting that there has been a buying surge in the last few weeks as buyers want to get in before rates are 5.5% or 6%. I’m expecting April, and maybe even May, to be quite strong as a result.“
Shills proclaiming “buy now or be priced out forever”? – shocking
Most housing is still priced based upon mortgage rates in the 3’s
Home prices have increased from 319950 in 2020 to 345000 in 2022, a whopping 3.84% compound annual growth. The rest of the nation is clocking in with double digits and some at 20%+ gains. Sales volume is now falling. That sizzle has turned into an ice cube dropped into water sound.
“Might break even”
Is that in real dollars, or nominal dollars?
In real dollars, their basis is already $806, rather than $700.
(for reference, nominal GDP was up 10% in 2021)
Or do you think they got the reno done for under $100k, in the last 18 months?
“You cannot use it to say “this is the price” in Chicago.”
Did I?
Let’s go see:
“Chicago Association of Realtors data released April 14 shows that the median price of attached homes sold in the city in March was down 2.3%, to $356,500. In the same month, the median price of houses grew by 2.5%, to $323,000.”
Huh, not only did I merely quote from Crain’s, the Crain’s quote doesn’t include any indication of “this is the price”. It’s actually using the medians properly, to show a downtrend for attached, set against an uptrend for detached.
Which, contra “Who cares?” is actually interesting, unlike the bare median number.
Yes, it is likely driven by mix, but it implies that smaller/cheaper condos are doing better than larger/spendier ones, and that there are still legs in the SFH market–which implies that renos and teardowns are likely to continue for a while.
Is that in real dollars, or nominal dollars?
Its just a number, who cares? ™
Nominal
“Or do you think they got the reno done for under $100k, in the last 18 months?”
If they did I want their contractor
Thinking the cost starts with a 2
$1MM – $60k Realator fees – $200k remodel – $15k Taxes/closing fees/etc
So $25k in “Profit”, maybe
In real $, its much worse
Is “luxuriate” a real word
Also how is this a penthouse when there’s a floor above?
“Sales volume is now falling. That sizzle has turned into an ice cube dropped into water sound.”
Gosh, the second hottest March sales since 2006’s housing bubble when the developers were building dozens of new condo buildings sounds SO terrible. It’s SO horrible in the Chicago housing market, it’s beyond belief.
Yeah- having those March sales up 26% compared to March 2020 is just awful. It’s SOOOOO cold.
Lol.
By the way, Planning Commission just cleared another high rise hotel/apartment building for Fulton Market.
But the housing market is so cold.
It’s tough being a bear and betting against America every single day. What a drag to have to lie all the time about how “awful” it is in our major cities.
“They’re already having to spend more. I guess those money trees are in bloom…”
Today’s buyers locked in weeks ago. Have you EVER bought real estate with a mortgage JohnnyU? Or was it 30 years so you don’t remember how it all works?
Rates were in the 4s just 3 weeks ago. But those buyers REALLY want to buy before they lose that rate lock and their costs rise. The banks only qualify you for so much. The buyers don’t want to have to go down in price or change neighborhoods if they don’t have to.
Agents are reporting an urgency among buyers right now because they DO have fear of having to pay more. Many think rates will rise to 6% or 7%. They don’t want to wait.
What all you bears are missing is that inventory remains at record lows with strong demand and the best job market in 20+ years. Still going to be buyers for that $700,000 2/2 even if some have to drop down to a $600,000 2/2.
Most impacted category will likely be 1-bedroom condos which are an apartment alternative. With 3% rates, they are cheaper than renting. But with 6% rates they won’t be. You’ll just keep renting.
“By the way, Planning Commission just cleared another high rise hotel/apartment building for Fulton Market.”
Why is this developer & the PC bucking demographics?
“I thought RN wasn’t HAWT(tm)”
I’ve never said RN wasn’t hot. Give them what they want. Renovated penthouse with a large private deck. How many of those are on the market for just $1 million right now?
None. This is it. It sold instantly. It’s cheaper to buy this with 20% down than to rent in nearby luxury buildings like One Chicago even at 5% mortgage rate.
Low inventory in River North in certain categories. Luxury is still overbuilt, especially with One Chicago coming on the market. Buyers want upgraded units. Don’t want to do anything but move in.
“Why is this developer & the PC bucking demographics?”
There are 9,000 apartments planned for Fulton Market over the next few years. No one is “bucking demographics.” They DO know what is coming. GenZ is also a massive generation so they will continue to spur demand.
“Agents are reporting an urgency among buyers right now because they DO have fear of having to pay more. Many think rates will rise to 6% or 7%. They don’t want to wait.”
So pulling demand forward. what happens after? (See cars for clunkers)
“What all you bears are missing is that inventory remains at record lows with strong demand and the best job market in 20+ years. Still going to be buyers for that $700,000 2/2 even if some have to drop down to a $600,000 2/2.”
Low demand and strong demand doesnt mean Jack if you cant afford it.
Why are you pushing the 2/2 condo – unless you get lucky (buying in an area that gentrifies) its an f’n loser for a couple that wants kids.
Should be low inventory
“There are 9,000 apartments planned for Fulton Market over the next few years. No one is “bucking demographics.” They DO know what is coming. GenZ is also a massive generation so they will continue to spur demand.”
I though someone was harping about Millennials and driving the market?
Who was that person?
“Many think rates will rise to 6% or 7%.”
Small price to pay to virtue-signal and disrupt the globe with sanctions. There can be no doubt that demand for US Treasuries will be affected negatively at the margin, and when bond prices go down, that means interest rates rise. But once again, the people running the Russophobic narrative don’t really have to worry. Elites are already in homes, have wealth, or the media narrative types are 27 year old female wine drunks, with no boyfriends, renting a 1 bd apartment.
“Is “luxuriate” a real word”
Yes, for ~4 centuries:
http://www.etymonline.com/word/luxuriate
You left out the best part
“c. 1300, “sexual intercourse;”
“I though someone was harping about Millennials and driving the market?”
Yep. Millennials ARE the housing market right now. This is the magic of demographics. The housing market was always going to be hot right now regardless of the pandemic, the level of the interest rates or anything else. They have to live somewhere and there are just too many of them in the important 28-32 age range.
The best job market in 20+ years is only helping them, however. They’re able to get new jobs with more money and they’re feeling good about their financial futures right now.
This should last another 2 to 3 years at this pace before it cools. Added bonus was the pandemic lighting a fire under many boomers, who want to move to the sunbelt, but were stymied by not being able to sell their suburban houses. But the rush to leave the cities in 2020 solved that problem for them.
In the sunbelt markets, it’s boomers and Millennials competing the new homes.
“So pulling demand forward. what happens after?”
They are already IN the market. Were already going to buy. But it probably means that April will be another strong month of sales. And maybe even May before we see the cooling due to higher rates in the summer.
“Low demand and strong demand doesnt mean Jack if you cant afford it.”
You have to live somewhere. If you were already looking to buy and have the downpayment, you simply trade down. Will be hard, psychologically, to adjust to though. But in the next few months, buyers will adjust.
Chicago is perfectly positioned for a rising rate environment. We have properties at all price points in most neighborhoods. You’ll have trouble with upper bracket single family homes, however. If you could buy a $1 million house at 3% but it’s $850,000 at 5%, that could be tough. Even if you move neighborhoods. There is simply NO inventory. Might have to trade “down” to a townhouse or a 3-bedroom condo instead. Or move to the suburbs with more options.
But at least you do have options, unlike the coastal markets where there might not be anything available to trade down to.
“But once again, the people running the Russophobic narrative don’t really have to worry”
Surprised you want to align yourself with a guy that publicly claims he’s going after Nazis.
A housing market with $0 price increases is not sizzling. It’s an ice cube considering inflation is above 8% and PPI is at 11%. Buy anywhere except Chicago if you want to see housing price gains. Denver, Nashville, Charlotte, Atlanta, Florida, Texas, Vegas, etc.
“A housing market with $0 price increases is not sizzling.”
Chicago has had 10% to 20% or more, price increases in the last 2 years. (Chicago and Chicagoland)
Downtown has suffered the most. Some neighborhoods, and buildings, have seen increases, some are still wallowing in to much inventory and sellers aren’t making a dime.
But I agree with you MikeHG that the most bubblicious markets are in the sunbelt, as you listed. 30% or more investor purchases in Charlotte, Atlanta and Phoenix. It will not end well for those cities. Stories out of those markets sound like living hell for traditional mom and pop homebuyers.
This is why the Fed must act more quickly. It really needs to crush the speculation going on in housing even if that means a lot of pain in some of the hottest markets.
Chicago’s market will slow with 5% mortgage rates too. That rate will slow every market. But Chicago remains affordable across the income spectrum so I like our chances.
We had our first 80 degree day of the year this weekend and the city was on fire. Insanity how many people were out and about. It’s going to be a wild summer in Chicago.
Also, all of those who fled the big cities in 2020, and never went back, are looking pretty stupid now. They are really going to miss out on a big renaissance in the cities post-pandemic.
There are going to be more new restaurants, hotels, concerts and entertainment than ever before.
You can already feel the vibe and it’s not even summer yet.
“ Chicago has had 10% to 20% or more, price increases in the last 2 years. (Chicago and Chicagoland)”
After what investment?
If a shitbox 2/2 cleared 20%, I’d agree
But that’s not reality.
“ Also, all of those who fled the big cities in 2020, and never went back, are looking pretty stupid now. They are really going to miss out on a big renaissance in the cities post-pandemic.”
Sold at peak and dont have to worry about crime & taxes?
Not stupid
“Sold at peak and dont have to worry about crime & taxes?”
Many who fled were renters. Those who owned fled are now stuck in the suburbs, lamenting that they didn’t stick around.
Crime and taxes up in the suburbs too.
Same story being told in every big city right now. It’s going to be CRAZY in the big cities this summer. Everyone was talking about the roaring 20s and, yep.
“If a shitbox 2/2 cleared 20%, I’d agree”
So it has to be 20% now to satisfy you in JohnnyU? And a condo?
Yeah- I’m sure there are some in the hottest neighborhoods that are up that much. But what do you consider a “shitbox”? Buyers paying $50k over ask for $325,000 2/1s in Logan Square.
“Yeah- I’m sure there are some in the hottest neighborhoods that are up that much. But what do you consider a “shitbox”? Buyers paying $50k over ask for $325,000 2/1s in Logan Square.“
Link to all of theses 2/1 going $50k over ask? Quick scan didn’t show anything meeting your criteria
“ So it has to be 20% now to satisfy you in JohnnyU? And a condo?”
Yes.
“Many who fled were renters. Those who owned fled are now stuck in the suburbs, lamenting that they didn’t stick around.
Crime and taxes up in the suburbs too.
Same story being told in every big city right now. It’s going to be CRAZY in the big cities this summer. Everyone was talking about the roaring 20s.”
Can you share some links to some articles in support of the claim that those who formerly owned in the city and “fled” to the burbs are “lamenting” the fact that they did?
Perhaps those same articles might address how crime is up in the burbs “too” (i.e., comparable to the crime increases in some cities have had people moving out or wanting to)?
Are there any particular age groups or other demographics that are viewing this summer to be like the roaring 20s?
Annony, I’ve seen a few articles about people regretting fleeing to rural and exurb areas. The articles typically focus on how the city folks clash with the country folks… “OMG, I can’t get Indian food delivered at 11pm in West Bumblefnck”
I am not convinced that there will be a huge mass migration back to the city. I think there are more people realizing you don’t have to pay half your income to live in a glorified dorm room and put up with the crime and filth.
Combine that change in attitude with changes in remote work, I think big tier 1 cities are not going to be doing well for a few years. It could be the beginning of a huge decline in city living kind of like the 70s, 80s, until city living became fashionable again with a new generation of people.
“Annony, I’ve seen a few articles about people regretting fleeing to rural and exurb areas. The articles typically focus on how the city folks clash with the country folks…”
Absolutely. I think there are even some folks who moved to Montana or whatever and came to find that just being anti-vax and viewing mask mandates as totalitarian oppression are not sufficient personality/political traits to fit in with the longtime residents.
“Combine that change in attitude with changes in remote work, I think big tier 1 cities are not going to be doing well for a few years. It could be the beginning of a huge decline in city living kind of like the 70s, 80s, until city living became fashionable again with a new generation of people.”
And the tier 2 cities too. As someone who has recently resumed going into the office in a tier 2 city a couple days a week, I’ve made a surprising observation: During most of the worst times of the pandemic, other than the brief period during which the office was closed, I had a handful of colleagues who went into the office everyday. These are folks who exercised tremendous restraint to not wear their MAGA hat during zooms. But I’m now getting the gist that these guys have come to the realization that driving from their burb into the office is a waste of time and being in the office has not owned the libs.
“Can you share some links to some articles in support of the claim that those who formerly owned in the city and “fled” to the burbs are “lamenting” the fact that they did?”
I don’t there are that many people who think that way. Big cities don’t offer what they used to in comparison to suburban or smaller tier cities.
Today, you can get good food and microbrews almost anywhere, even in small towns. It used to be in Chicago in the 1990s before the internet, you’d pick up the Chicago Reader newspaper, it was thick with all kinds of cultural events, concerts, artsy things, sports, bar specials etc. going on. Massive classified section. Today, all culture has drifted ONLINE and you don’t need to be in a big city to get exposure to culture. Not sure what “culture” Chicago really has going on anymore. Everyone’s on their phones.
Kinda like you don’t have to live in an upscale suburb for access to a good public library anymore the internet has it all.
Even things like not having access to world class hospitals are annoying. Living in smaller cities or rural areas aren’t always what they seem.
https://www.nytimes.com/2022/02/25/realestate/new-yorkers-return-nyc-pandemic.html
“I am not convinced that there will be a huge mass migration back to the city.”
It’s already happened. Chicago downtown apartments back to 95% occupancy rate. And condos/single family home sales remain at 15 year highs. SOMEONE is moving to Chicago.
I don’t know what’s happening on the coasts.
“Combine that change in attitude with changes in remote work, I think big tier 1 cities are not going to be doing well for a few years. It could be the beginning of a huge decline in city living kind of like the 70s, 80s, until city living became fashionable again with a new generation of people.”
Higher crime for the next few years could certainly cause some to rethink where they were living, ala the 1970s and 80s. But the Millennials have already spoken. They are the largest generation and they want to live in the cities. The pandemic hasn’t changed that. Unless they decide to move to the suburbs, I don’t see how we get a city decline.
But we’ll have to see where things shake out.
“Even things like not having access to world class hospitals are annoying.”
That was an absolute must have in considering places to live, which ruled out any small town. Over the years I found that the best doctors are associated with major medical centers.
“Are there any particular age groups or other demographics that are viewing this summer to be like the roaring 20s?”
I would say it’s everyone? One guy I talked with said he and his wife walked 8 miles on Saturday in the beautiful summer weather we had in Chicago. Lol
Brunch was sold out everywhere this weekend. Young people have money and want to go out with friends. Moulin Rouge musical just opened in Chicago and they’ve had a good turnout even though you have to be vaccinated and masked to get in the theater. Ravina tickets are going on sale and everyone is talking about that.
People are excited to be involved in the cultural life of the city again. That’s why we live here. Chicago is amazing in the summer. It’s going to be wild.
“Link to all of theses 2/1 going $50k over ask? Quick scan didn’t show anything meeting your criteria”
Yep- nothing on the market. When they do come on they go under contract right away. End up paying over ask in the hot neighborhoods. It’s crazy out there.
But the 5% rates will put a slowdown on those bids over ask. Or, it should. But we’ll see.
“That was an absolute must have in considering places to live, which ruled out any small town. Over the years I found that the best doctors are associated with major medical centers.”
It’s a huge issue and you don’t even think about it. In that article, there was also discussion about access to daycare. It’s not just about restaurants or quick Indian food. It’s basic services that many in larger cities take for granted.
“Yep- nothing on the market. When they do come on they go under contract right away. End up paying over ask in the hot neighborhoods. It’s crazy out there.”
So it’s made up
Where’s HD to tell us that Suzanne researched it.
It’s like hearing from David Lereah.
“Moulin Rouge musical just opened in Chicago and they’ve had a good turnout even though you have to be vaccinated and masked to get in the theater.”
Is there really still a vax requirement for entry and mask mandate in the city, or are those the venue’s rules? We’ve had no requirements here for a while now, though public transit did have them up until a week ago (I haven’t been wearing masks indoors for months now, but I had been wearing one on my bus commute a couple days a week, and was bummed when that requirement was suddenly lifted).
“Ravina tickets are going on sale and everyone is talking about that.”
Hopefully those conversations are helping to distract from some of the why-did-we-flee-to-the-burbs lamentations.
“Is there really still a vax requirement for entry and mask mandate in the city, or are those the venue’s rules? ”
It would be venue rules. No municipal requirement.
“Ravina tickets are going on sale and everyone is talking about that.”
—————————————
Tanglewood, myself.
“Tanglewood, myself.”
How do you get there from Bucktown? Or is there an East Bucktown in Lenox?
Millennials and gen Z get all their culture from streaming services or online… they don’t give a flying fuck about having some old person musicals or operas that they can attend for exorbitant amounts. Proximity to those things when they are starting families is inconsequential, as if they want to go see a concert downtown or in another big city they can just travel there… nobody needs to live near these things anymore and deal with the insane amount of crime and high taxes.
“Millennials and gen Z get all their culture from streaming services or online… they don’t give a flying fuck about having some old person musicals or operas that they can attend for exorbitant amounts.”
You are really out of the loop sonies. Moulin Rouge, the musical, has been updated and includes music that mostly only the younger generations would know. Not sure how many Baby Boomers are listening to Lady Gaga or Rihanna.
My daughter went to opening night with her friends and loved it. She is GenZ. And yes, this is why she lives in Chicago. There’s so much to do.
You are foolish to think that Millennials and GenZ don’t want to live in the big cities even if they are working remotely. That is where their social lives are. And many have actually grown up IN the city. That’s also the difference between the younger generations and Baby Boomers and GenX. Most of them were raised in the suburbs. But not so of the younger generations.
Chicago does offer more venues and locales to post selfies for Instagram, so in that regard it offers more opportunity for what Gen Z calls “culture”.
Lyric Opera is too woke for anyone to take it seriously today. They rewrite the librettos, modernize and queer the sets, hire non-whites to play European roles, etc. And yeah, the prices are too high. The Art Institute fired its docents because of anti-white racism too. It’s horrible. Bad and immoral people are running things now. Arts should reflect beauty and light, not darkness.
“It would be venue rules. No municipal requirement.”
Broadway is trying to keep its performers safe. They are performing without masks so they have put on requirements for those going to see the shows. It hasn’t stopped outbreaks among the cast though. But my daughter didn’t mind wearing a mask during the performance.
“They are performing without masks so they have put on requirements for those going to see the shows. It hasn’t stopped outbreaks among the cast though.”
What makes these performers any different than athletes or even people working at McDonalds or Jewel on a daily basis? Ridiculous. It’s all virtue-signalling and it’s a reason people cannot stand “the arts” and so-called “artists” sometimes. There’s always a negative and angry undercurrent of politics in their modern arts, not any beauty. These pervs then “crowd out” any normal people who might otherwise pursue the arts. I suppose the many of the performers might have compromised immune systems from their physical habits and lifestyles choices. So we all have to suffer their insufferable ways and attitudes.
I dunno. Seems like the NBA sure had a lot of Covid cases. Maybe their fans needed masks.
And how exactly is following reasonable health protocols virtue signalling?
Broadway makes money so how do you conclude that “people cannot stand the arts”?
Who are these pervs you are talking about and how do you know they are pervs? How are you familiar with their health status?
“Moulin Rouge, the musical, has been updated and includes music that mostly only the younger generations would know.”
I liked the Toulouse-Lautrec exhibit the Art Institute had a while back (07?). I loved the movie. Speaking of the movie, that reminds me, one month to go for Kenobi!
“What makes these performers any different than athletes or even people working at McDonalds or Jewel on a daily basis?”
They are singing. We know that that is perhaps the most likely way to spread COVID. Although yelling is probably up there too.
Service workers are mute?
Who’s closer to their audience?
“Service workers are mute?”
Service workers can choose to wear a mask and still do their job.
“How do you get there from Bucktown? Or is there an East Bucktown in Lenox?”
—————————————————
Private rail car to Albany, limo to Stockbridge.
“ Service workers can choose to wear a mask and still do their job.”
As long as you get your Cheescake factory order it’s all good
Fuck the poors, right?
Just posted my April update. Although sales were down 3.1% (IAR will report 5.4%) last year was extremely high. That was the second highest level in 17 years and 24.5% higher than 2019. Inventory still hitting new lows and stuff is selling fast. https://www.chicagonow.com/getting-real/2022/05/chicago-real-estate-market-update-2nd-highest-april-sales-in-17-years/
“Just posted my April update. Although sales were down 3.1% (IAR will report 5.4%) last year was extremely high. That was the second highest level in 17 years and 24.5% higher than 2019. Inventory still hitting new lows and stuff is selling fast.”
Thanks for the link Gary. 1.6 months for SFH and 1.9 months for condos. Wow. And the condos include hundreds of units over $1 million downtown. It must be literally days worth of inventory in some neighborhoods for attached properties.
Sales will slow simply because there is nothing on the market to buy. I can’t imagine trying to buy a SFH right now, even outside the GreenZone with inventory this low.
There are just 23 homes for sale in Portage Park under $400k and just 13 homes in Jefferson Park under $400k. Wow.
https://finance.yahoo.com/news/us-home-sales-plunge-lowest-140939464.html
The impossibility of this is the new HAWTNESS!
I thought that demographics trumped everything?
“I thought that demographics trumped everything?”
As I’ve said for months now, sales will slow when mortgage rates rise. They always do. All we need to do is look at the last time they rose over 5% in 2018-2019. Sales fell. And this time, rates rose at their fastest rate in 30 years. Yeah- if I was thinking of buying a new home but hadn’t done it yet, I was definitely moving to the sidelines in April. After all, depending on where I lived, I might have been priced out due to that increase.
California new home sales swiftly slowed as many of those buyers were stretching already as it was.
Chicago existing home sales are slowing. You can see it in the inventory, which is starting to build. Also, some properties that would have sold within a week just 3 months ago are sitting on the market now as buyers have moved to the sidelines.
Additionally, there have been layoffs in Chicago’s tech industry already with unicorns like Cameo laying off and big, established tech companies putting on hiring freezes. This will spook home buyers as well, as it should. Some buyers will hold off on caution.
The Fed needed to slow the housing market. There was too much speculation going on. 5% was going to do it. And rates were as high as 5.6%.
Eventually, buyers will adjust to the new rates if they remain above 5%. But the 10=year treasury is selling off again so they may duck back below 5% which would not be a good development for the real estate market. We need to get the speculation out, including the investors, even if it’s painful.
I really wish commenters on this blog were able to have a real discussion about where Chicago’s housing market was going in the next 12 months, but most are incapable of having an actual discussion about the higher rates and a slowing market.
Chicago’s market has been red hot, no matter how much the bears on this blog try and gaslight it. It was always going to slow. But we need a lot more inventory to see price declines. And properties that were in demand 3 months ago will be in demand again this summer, such as single family homes priced under $1 million.
You’ve said a lot of contradictory things.
“I really wish I wwa able to have a real discussion about where Chicago’s housing market was going in the next 12 months, but I’m incapable of having an actual discussion about the higher rates and a slowing market.”
FIFY. You couldnt have an honest discussion if your life depended on it
But since you said you wanted it…
Where will prices be in 12 months in
-Bronzeville/HP
-SL
-Downtown (South of the River)
-RN
-LP/LV/BT
“Chicago’s market has been red hot, no matter how much the bears on this blog try and gaslight it. It was always going to slow. But we need a lot more inventory to see price declines. And properties that were in demand 3 months ago will be in demand again this summer, such as single family homes priced under $1 million.”
This will fall on deaf & dumb ears but here goes
HAWTNESS ™ is a comparison and needs a basis. Chicago’s housing market has been red hot compared to what?
Why do you need more inventory if buyers cant afford whats out there (And/or until some sort of equilibrium is reached with P Vs I) You’ve brought up multiple times that buyers would look at other locations, where’s the Hawtness in HP/Bronzeville/where’s the appreciation?
I’m really anxious to see how May turns out. For the past few months I’ve been seeing fewer contracts written than last year and that has continued in May with a draw down in pending home sales compensating to keep closings up. May closings might not be that high. Unfortunately, the weekly data is limited.
Inventories really seem to be changing. Looks like more detached homes on the market this year but significantly less attached homes.
Now, we’re hoping that the Raleigh market takes a hit. My wife is watching closer than I am and she thinks she’s seeing more price reductions there. The April data confirms that a bit.
“Now, we’re hoping that the Raleigh market takes a hit. My wife is watching closer than I am and she thinks she’s seeing more price reductions there. The April data confirms that a bit.”
All the hot sunbelt markets are going to take a hit Gary. They are just way overheated. Of course, you’re up against the Apple workers and their $180k salaries and all the WFH workers from the Bay Area who fled there but that is mostly over now.
Watch what the new home builders do. Are they starting to offer incentives in that market? Existing homes are their competitive. If they start discounting, builders have to as well.
“I’m really anxious to see how May turns out.”
Downtown condo inventory is building. Seems like some investors are trying to get out. Lots of studios and 1-bedrooms suddenly on the market. Also seems like some neighborhoods on the north side are seeing slowing. More inventory already, especially in condos.
“HAWTNESS ™ is a comparison and needs a basis. Chicago’s housing market has been red hot compared to what?”
It’s been the hottest sales in the last 15 years for the last year or more. Inventory is at record lows.
Is that “hot” enough for you?
Read.The.Data.
“Watch what the new home builders do. Are they starting to offer incentives in that market? Existing homes are their competitive. If they start discounting, builders have to as well.”
So we’re interested in a particular new home development. They were going to start releasing 4 homes in mid-June (scattered out over a couple of months) for completion starting in September. The logic was that they needed to be close enough to completion to have a handle on their costs. A few weeks ago they notified us that they were going to release all of them at least 6 weeks early – more than that in some cases. Hmmm. I wonder why?
But here’s the kicker. When we were there in March they told us they never had more than one couple interested in a released home before. Of course, the first home we wanted we had to bid against another couple. We lost. We think another home we are interested in will also have multiple bids.
Interesting development in the last hour. Late last week the developer released a home that was nice but not our first choice. Rather than wait for the release of our first choice, which we feared would have multiple offers because of the features we liked, we decided to put in an offer below list on this home and kick back and wait. It’s been like 6 days and it looks like there hasn’t been much interest in this home so the builder just accepted our offer. I suspect they just want to get this stuff off their books before they get stuck with a depreciating asset. Now we’re stuck with it 🙂
“A few weeks ago they notified us that they were going to release all of them at least 6 weeks early – more than that in some cases. Hmmm. I wonder why?”
The builders are definitely putting more product out there as buyers have moved to the sidelines. They have waitlists and are going further down the lists to see who is serious about buying, and who can qualify.
5% rates were always going to slow the market both for new and existing homes. After all, home prices are at record highs and then the monthly payment just got more expensive as rates rose. And new construction homes are more expensive than existing homes, in most markets. That market always slows first.
“Late last week the developer released a home that was nice but not our first choice.”
Why settle for your second choice? The housing market is going to slow much further than what it is doing right now. In 5 or 6 months you’ll have your pick.
“Why settle for your second choice? The housing market is going to slow much further than what it is doing right now. In 5 or 6 months you’ll have your pick.”
Several reasons. We like this development and this builder. There are only 3 homes left that we are interested in and if we pass on this one there is no guaranteed that we can get the other ones. And my wife decided that, given the price of this one, she likes it. Also, as home prices go down across the nation the price of my home here in Chicago could go down as well. It could end up being a wash. Furthermore, it’s not clear to me how susceptible Raleigh will be to higher mortgage rates since prices are driven by supply and demand, not just mortgage rates. The supply is limited and demand is high from all the companies moving there.
And I don’t want to go through another winter in Chicago or risk getting shot if I stay here much longer.
“There are only 3 homes left that we are interested in and if we pass on this one there is no guaranteed that we can get the other ones.”
You have to live your life. There’s always buyers remorse in all the hot housing markets. You never get exactly what you want.
Sounds fun to buy “new” where you can pick out all the finishes and make it exactly as you want it.
“Furthermore, it’s not clear to me how susceptible Raleigh will be to higher mortgage rates since prices are driven by supply and demand, not just mortgage rates.”
Market is slowing quickly even in the hottest markets like Boise and Austin, so, apparently, these markets WILL be susceptible to 5%+ mortgage rates. Builders are actually doing incentives already in Austin.
BUT- depends on the price point, right? Baby Boomer retirement homes won’t feel as much pressure. They have plenty of equity and cash to roll over except the stock market sell-off might spook them a bit. Last year, they were feeling as rich as hell. In 2022, not so much. It’s the first time buyers, though, who will feel the most pressure.
Toll Brothers said this week that it was their “affordable” luxury homes where they are seeing the most slowdown. Those start around $500,000. Not seeing much worry at $1 million.
Congrats on Raleigh Gary. That’s a fun town, and area. One of my family members nearly moved there a few years ago from the Midwest (pre-covid) but then concluded that they couldn’t take the hot summers. Lol.
Nowhere is perfect.
Personally, I’m a big fan of Virginia. It has all 4 seasons, beautiful mountains and oceans, big cities but winter is mild and summer not quite as long/humid as further south in the Carolinas.
Gary: Toll also said the slowdown in the “affordable” category was showing up the most in South Carolina, including Charlotte and Charleston.
“Sounds fun to buy “new” where you can pick out all the finishes and make it exactly as you want it.”
Hah! The builders in Raleigh don’t do custom homes any more. Too hard to do in a supply chain constrained world and they don’t have the time to deal with indecisive buyers. 100% spec homes. And there are last minute substitutions – e.g. tall toilets…not available, some of the homes did not get insulated plywood roofs.
“Personally, I’m a big fan of Virginia.”
We lived in Richmond for 6 years before coming back to Chicago in ’99. I loved it there. My wife…not so much. But Raleigh/Durham/ Chapel Hill has better hospitals anyway. Funny thing is that when we lived in Richmond I had a health issue and ended up going to Duke twice a year to deal with it. The doctors in Richmond were definitely not up to the task.
“Market is slowing quickly even in the hottest markets like Boise and Austin, so, apparently, these markets WILL be susceptible to 5%+ mortgage rates. Builders are actually doing incentives already in Austin.”
What? “Builders?” Toll? Lol. I was in Austin a couple weeks ago. It was my first time visting there. Some of the neighborhoods I walked through reminded me of parts of Atlanta I lived in or spent most of my time in while there (Virginia Highlands, Decatur, etc.). “In” Austin, there are pop-tops and tear-downs (in the style common around Boulder), not “builders” developing new subdivisions. Teslas in driveways and Beto signs in yards of $1 – 2 million homes that were probably dumpy cottages a few years ago.
As for the “Market is slowing quickly even in the hottest markets,” recall that a month ago or so I mentioned that, in my hood, there was a sudden rush of new listings, largely of the “we will list at an absurdly high price, and we’ll worry about where we’ll live if it sells for that, and will rent forever if we have to” variety, and you may recall noting that the market was “slowing,” which I questioned. Anyways, ALL of those houses have not only ALREADY sold, they all did so for between $100k – $300k above list (so, either clueless brokers, which obviously is a very real possibility, or the market remains pretty hot). Yeah, yeah, rate locks, etc. I know that we’ll need to wait a month or so see how things go for the buyers who are having to work with these current rates, but I will eat my shorts of it somehow becomes a buyer’s market.
“What? “Builders?” Toll?”
No. Not Toll. Lennar was offering incentives already. It’s lower price point so it makes sense that those are the buyers who have already moved to the sidelines at 5%.
Just looking at the Lennar website and they have 2 communities in Austin itself and the rest are in the suburbs. But the Austin suburbs weren’t any less hot than the Austin city-limit market over the last 2 years. Multiple bids everywhere. It tells you what is going on that the builders are already seeing the slowing.
Also, Toll said they saw the slowing in Boise and Charleston and Charlotte, at their lower price point. All three of those markets were red hot over the last 2 years. But prices have doubled in some cases. At the lower end, the mortgage rates definitely DO matter.
“Hah! The builders in Raleigh don’t do custom homes any more. Too hard to do in a supply chain constrained world and they don’t have the time to deal with indecisive buyers. 100% spec homes.”
Yikes. Really????
Haven’t heard of this. But I guess I figured most were Toll Brothers type of quality. They do 80-20 spec and the 20% you still get to customize with your own finishes.
A bunch of the other builders do made to order too. I can’t remember who it was. Maybe DR Horton? Because they said with the supply chain issues they had to cut their SKUs in half. Could no longer offer 10 different appliance packages, for instance, because they couldn’t get certain appliances in time and it was holding up completion. Same with types of cabinets, counter tops and tiles. But they didn’t build on spec. You still go to go to the design center, but just fewer choices.
About Richmond: the medical centers definitely are an issue. I have friends looking in Williamsburg area. Medical care is a big part of it.
But 1999 was a whole other world in a city like Richmond, wasn’t it? So much has changed in the secondary cities over the last 20 years.
You can’t go wrong with either area though. It’s a lovely part of the country.
Also, the airport in Raleigh is probably much better than Virginia’s smaller cities. A lot more national non-stops and probably even some international flights.
“Haven’t heard of this. But I guess I figured most were Toll Brothers type of quality. They do 80-20 spec and the 20% you still get to customize with your own finishes.”
Well, in all fairness I’m talking about the large local builders. We didn’t look at any of the national builder developments. And the national builders might be able to buy in a large enough volume that they know what their supply is.
“And the national builders might be able to buy in a large enough volume that they know what their supply is.”
Yep. National builders are taking market share because of inflation and the supply chain issues. They have the scale to go to suppliers direct. Instead of waiting 6 months for a garage door, may only wait 3 months. Also since they are buying in bulk, can get better pricing.
Small builders just got crushed by the supply chain issues over the last 12 months.
Congratulations, Gary! Can’t keep your life on hold, waiting for the market to change.