Market Conditions: May Sales Fall YOY But Remain Near 11-Year Highs
I almost forgot to do an update on the May home sales.
It’s not a very exciting story right now.
The market is still tight because inventory remains low.
The city of Chicago saw year-over-year home sales decrease 2.2 percent with 2,978 sales in May, compared to 3,046 a year ago. The median price of a home in the city of Chicago in May 2018 was $306,000 up 0.1 percent compared to May 2017 when it was $305,600.
May Sales:
- May 2008: 2119 sales
- May 2009: 1557 sales
- May 2010: 2057 sales
- May 2011: 1705 sales
- May 2012: 2037 sales
- May 2013: 2834 sales
- May 2014: 2453 sales
- May 2015: 2750 sales
- May 2016: 2980 sales
- May 2017: 3046 sales
- May 2018: 2978 sales
Median Price Data:
- May 2008: $319,500
- May 2009: $225,000
- May 2010: $230,000
- May 2011: $190,000
- May 2012: $203,000
- May 2013: $234,000
- May 2014: $269,250
- May 2015: $281,000
- May 2016: $290,750
- May 2017: $305,600
- May 2018: $306,000
“Median prices showed a healthy, sustainable uptick in May, giving property owners an opportunity to continue to gain a return on their investment while at the same time allowing consumers a solid shot at getting into a home,” said Illinois REALTORS® President Matt Difanis, ABR, CIPS, GRI, broker-owner of RE/MAX Realty Associates in Champaign. “The overall trend of decreasing inventories is unabated, so it’s likely this market dynamic will continue to place upward pressure on home prices through the summer.”
30-year mortgage rates averaged 4.6%, up from 4.47% in April and up from 4.01% in May of last year.
“Buyers are feeling the pressure to move quickly, with shorter market times and fewer homes to choose from,” said Rebecca Thomson, president of the Chicago Association of REALTORS® and principal of Thomson Real Estate Group. “For sellers, it’s all about positioning. With prices holding steady, sellers need to price it right from the beginning.”
Could a trade war take the shine out of the housing market in the second half of 2018?
“While month-to-month sales in the last quarter recorded solid gains, the sales volumes were slightly lower than a year ago,” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois. “The continued expansion of the economy has certainly helped sustain the housing recovery although rising interest rates and uncertainty about the impact of the current trade war may dampen growth in the rest of 2018.”
Statewide, inventory declined 7.6% year-over-year to 55,126 from 59,644 homes. The time it took to sell also fell, to an average of 49 days from 52 days in May 2017.
Is the market as hot this summer as it was in the spring?
Illinois median home prices show gains in May, sales down slightly [Illinois Association of Realtors, Press Release, June 20, 2018]
There is nothing on the market in the City still. Supply is less than 3 months or so. So glad I’m not a buyer right now.
“There is nothing on the market in the City still.”
There’s plenty. If there wasn’t, everything would get multiple offers and they aren’t.
I concede that it’s not great. In some neighborhoods, certain types of properties are in short supply. It all depends on where you’re looking and your price point.
I find there is a general sense of lethargy, apathy and “boredom” in the current market. I am having a hard time getting clients to even commit to an appointment, let along make an offer on a property that I think would be good for them. Maybe it’s the still-uncertain state of the economy, or the political zeitgeist, or a feeling that the grass won’t be greener on the other side of town after all.
Lethargy?? Places are snapped up very quickly. Maybe in Englewood it’s slow.
“I find there is a general sense of lethargy, apathy and “boredom” in the current market.”
Yes!
This.
Even finding “interesting” properties for this site is a chore right now. Most properties are really boring. Many are overpriced. The lofts are the best things out there right now. There’s not even much cool vintage.
“Places are snapped up very quickly.”
It depends.
Under $500,000 in the GZ: it will probably be under contract within a month. If it’s not, then it’s overpriced.
Everything else- it depends on neighborhood, finishes etc. Get too greedy and it will sit for months.
If it’s over $1 million, harder to sell.
Some properties continue to be on the market for years. Those are in the upper, upper bracket though.
Near record sales, near record low inventory. Sounds like a lethargic market to me.
Oh and in May 2018 the average home was on the market for 33 days before sale.
If a trade war causes a recession the first thing the fed will do is lower rates… this is probably a year minimum from now, I don’t think it would have an effect on the housing market unless the stock market crashed 20% or more and massive layoff started happening before the end of the year (not extremely likely either)
If prices aren’t increasing much despite low inventory, you could say buyer response to low inventory is less interest in buying, i.e., lethargy.
Prices don’t seem to be increasing much.
It’s hard for prices to appreciate as much as they are around the country (Chicago has been 19th or 20th out of 20 in price gains for the case Schiller index for what seems like 4 years now) when property taxes have gone up from $5,000 to $9,250 in the five years since I purchased a Fulton River condo. As long as that continues, Chicago will lag terribly. The income tax increase from 3% to 5% back down to 3.75% back up to 4.95% hasn’t helped either. And if Madigan gets his way, they’ve already lined up legislation for it to be 6.5% in 2019.
“And if Madigan gets his way, they’ve already lined up legislation for it to be 6.5% in 2019.”
Madigan?
What do you think is going to happen in Chicago in the next 2 years?
We have another $400 million shortfall in the pensions that is payable in 2020. Where will that money come from? Gotta raise taxes on something. What will it be? Another property tax increase? A larger tax on gasoline? A tax on water? Some kind of commuter tax? A larger tax at O’Hare?
It’s gotta come from somewhere.
gee who knows maybe spend less?