Chicago Home Sales Tumble in October, But Prices Climb Modestly
Home buying in the Chicago area plunged sharply in October, continuing a downward trend in sales that began over the summer.
In October sales fell 6.3 percent in the Chicago metropolitan area compared with a year earlier, according to a report released Tuesday by Illinois Realtors. The drop in sales followed a 6 percent decline in July and a flat September, although sales popped up in August.
October's decline was the worst since an 8.5 percent plunge in November 2014. In October there were 8,762 closed sales, compared with 9,350 in the same month in 2015.
Yet, despite the falloff in sales, prices continued to climb modestly. The median price of a home in the Chicago area in October was up 8.1 percent from a year earlier — $216,250 compared with $200,000.
In Chicago the median price of a condo rose 3.5 percent since October 2015, to $299,250. Single-family homes rose 15.7 percent to $217,500. Sales volume, however, followed the same trend in Chicago as has been evident throughout the metropolitan area. Sales of condos in the city declined 9.4 percent and single-family homes were down 8.1 percent.
While prices in many major metropolitan areas have recovered from the housing crash, the Chicago area's recovery is lacking. Analysts have attributed the sluggish recovery here to higher unemployment than the national average and uncertainty over local and state budget issues.
The median price of a Chicago-area home was $225,000 in 2008, and in today's dollars the price would be $250,785 if the market had fully recovered, said Geoffrey Hewings, director of the University of Illinois Regional Economics Applications Laboratory. He is forecasting that home prices in this area will not recover fully for at least 2.5 years if recent trends continue.
"We are seeing a slowdown, definitely," said Doug Carpenter, president of the Illinois Realtors. Yet he thinks there is pent-up demand and "hopefully there will be a pickup now that the election is over."
A major problem is an absence of homes on the market, he said. The inventory of homes was down about 17 percent from a year earlier and the average home is on the market for only 51 days — a very short period.
Real estate agents say that when homes are on the market for six months, that creates a buyers' market.
"We are fighting the low inventory," Carpenter said. "Buyers are holding back because they aren't finding what they are looking for in the market." And potential sellers are not anxious to sell when their home values have not recovered to peak levels, he said.
In the nine-county metropolitan area, only Lake and Grundy counties incurred both price and sales declines. Typically, prices are rising.
In Lake County, the median price fell 4.4 percent during the year through the end of October, to $205,000. Sales were down 6.9 percent. In Cook County, prices rose 10 percent, with the average condo up 9.1 percent to $215,000 and the average single-family home up 9.8 percent to $221,550. Sales in Cook County declined 5.9 percent.
Inventory was down sharply throughout the metropolitan area. The largest number of sales, according to Hewings, has been in the $100,000 to $200,000 price range. Sales have been especially slow when priced over $500,000. About 58 percent of all sales in October ranged between $100,000 and $300,000. Less than 10 percent were over $500,000.