Chicago Real Estate Not Seeing Winds Of Change

Chicago Real Estate

Chicago was re-gentrified over the past 35 years or so, and its real estate height hit at the point of the Great Recession. Though, other markets have rebounded from single-family home and wealthier residents’ continuation of the real estate trade. Chicago, which has a great deal of new and old wealth continues to struggle, particularly in 2016.

Both March and February were sluggish and slipped nearly 1% since the same time last year. This 0.9% slip will actually be more like a 3.4% drop once the Illinois Association of Realtors compares 2016’s numbers to 2015’s actual numbers.

From a historical viewpoint, March’s numbers, though, do not necessarily paint a bleak picture. In actuality, if we were to graph the past 7 years of data, they point to a strengthening market over time. This year is stronger than the past 6  years. While it is moving upward, it is ever so slightly, and definitely nothing that seems to point to any great growth.

Home Contract

It is not surprising but there has not been much contract activity in the past 3 years either. It makes sense that March is probably dropping about 3.3% from 2015’s numbers. This could be the weakest month for contracts since November 2014. What this indicates is that the sales figures are going to be sluggish in the coming months.

Pending Sales

While contracts and sales in the past few months have been lagging, there is one positive indicator. It turns out that March’s pending home sales figures are up to a 2.7 month supply of homes that are actually under contract. This compares to the less than 2.4 month supply from this time last year.

This will drive closings in coming months. Yet, the question is how the pending home sales numbers rise when contract activity is very weak. The long story short is that the safe bet is that it is a matter of having fewer contracts crumbling and falling apart in this past month.

Distressed Home Sales

The number of distressed sales is still falling though at a slower pace. In the month of March, it only had 19.6% distressed sales compared to 21.9% this time last year. This accounts for the decline in sales overall. The distressed properties that are up for sale is declining while the sale of homes not in distress are increasing year over year. It turns out that the distressed sales are increasing in poorer neighborhoods, though.

Chicago Home Inventory

The low sales figures would be of great concern. Though, there is such a low home inventory that it is actually a good sign. The reason is that the home inventory is incredibly low, and that means there is not sufficient inventory for buyers.

Even condos are only at a low 2.9 month supply. This is down from a 4.0 month supply compared to last year. Detached homes have a 3.7 month supply that is a decline down from 4.9 months this time last year.

Lake View is going counter to this trend compared to the rest of the city. In Lake View, the supply of detached homes diverges from condominium and townhome supply. The detached homes are at a 7.2 month supply while condos and townhomes only have a  2.6 month supply. The detached home supply is up to 7.2 from just 3.7 months supply this time last year. This 7.2 month supply is actually the highest level that the neighborhood has seen in 5 years.

Home Sale Market Time Chicago

Now that the inventory is thin, just finally starts to see further drops in the market times. Condo sales in March sold within 92 days. That is a drop of 10 days down from 102 days for sales last year. Detached homes were taking 100 days to sell in March, down from 110 days this time last year. They may not be large declines but they do happen to be the best numbers that have been seen in 9 years.

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