Market Conditions: March Sales Fall 24.8% YOY as Slowdown Continues
March sales were down again. But last March was the month the Fed first started raising rates in this cycle. Mortgage rates started sharply rising in March 2022. Those rates quickly cooled the housing market.
But is the slowdown playing out as we all thought?
From the Illinois Association of Realtors:
The city of Chicago saw a 24.8 percent year-over-year home sales decrease in March 2023 with 2,168 sales, down from 2,883 in March 2022.
The median price of a home in the city of Chicago in March 2023 was $334,000, down 3.2 percent compared to March 2022 when it was $345,000.
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 2,883 $345,000
2023 2,168 $334,000
Just a reminder that March 2022 was the third hottest March since 1997. So even though there’s a big drop year-over-year, 2023’s sales were still higher than recent years, including 2019 and 2020.
“While we continue to see a decline in closed sales that matches the decline in inventory, those who were on the fence during the hectic pandemic market are finding opportunities to enter the market with positive hope,” said Sarah Ware, president of the Chicago Association of REALTORS® and principal and designated managing broker for Ware Realty Group in Chicago.
In Chicago, single family home sales fell 15.3% to 811 while condo sales declined 29.5% to 1,357.
Statewide, inventory continued to decline, falling 16.2% to 17,379 properties from 20,735 last year.
In Chicago, inventory fell 23.3% to 4988 from 6506 last year. Days on the market rose 7.5% to 43 days from 40 days last year.
“This time of year, it is typical to see month-to-month increases in sales, and March 2023 was a great example of that in Illinois,” said Michael Gobber, Illinois REALTORS® 2023 President and designated managing broker-partner, Century 21 Affiliated in Westchester.
“Prices and sales increased last month in both Illinois and the Chicago PMSA,” said Dr. Daniel McMillen, head of the Stuart Handler Department of Real Estate (SHDRE) at the University of Illinois at Chicago College of Business Administration. “Median prices are at approximately the same level as this time last year, although the number of sales is lower. Our forecast is for prices to appreciate through July, but at a lower rate than last year. We expect the number of sales to grow at a faster rate over the next quarter than last year’s rate.”
The 30-year fixed rate mortgage was 6.54% in March 2023 up from 6.26% in February. It’s also still elevated from March 2022 when it was 4.17%.
But it has now been a year since we’ve seen mortgage rates in the 3s.
While sales are down, they’re not out. What will it take to slow this market further?
Illinois March home sales and median prices fall, while average days on the market rise [Illinois Association of Realtors, Press Release, by Bill Kozar, Apr 20, 2023]