Chicago-area home sales rose at a slower pace in 2017 than in each of the preceding two years, in large part because demand outstripped supply. That predicament, however, also meant a boon for sellers.
According to a report issued Wednesday by the Illinois Association of Realtors, sales of existing single-family homes and condominiums in the nine-county Chicago area last year totaled 118,131 properties, an increase of 1.2% from 2016. The median price of $235,000 for the year was up 5.6% from 2016.
Meanwhile, within the city of Chicago, home sales rose 1.8% year over year, to 28,621 properties sold. The year-end median price was $285,000, up 4.8% from 2016.
After falling in 2014, the volume of homes sold in the Chicago area rebounded sharply in 2015 and stayed strong in 2016. More recently, though, a dearth of new listings has hampered potential buyers' efforts.
In December, for example, potential buyers in the Chicago area had about 5,200 fewer properties to look at, compared with December 2016. In Chicago, there were about 800 fewer listings last month than in December 2016.
As a result, sellers have found their properties getting snapped up by buyers at a rapid pace. Last year, it took an average of 46 days for a home to go under contract in the Chicago area as a whole, and the average was 41 days within Chicago.
The outlook for the area's housing market this year remains unclear, in part due to the recent federal tax changes.
"A major uncertainty in 2018 is the net impact limitations on state and local tax deductibility and the mortgage interest will have on one hand, with the reduction in tax rates that should increase consumer disposable income on the other," Geoffrey J.D. Hewings, emeritus director of the University of Illinois' Regional Economics Applications Laboratory, said in a news release.
Signed into law by President Donald Trump late last month, the federal tax overhaul limits to $10,000 the federal tax deduction that can be taken on all state and local taxes — property taxes included. For new mortgages, the law also restricts the mortgage interest deduction, limiting it to loans of $750,000 or less.
