Chicago Home & Condominium Rebound Continues As Resale Prices Rise
Benchmark 30-year fixed mortgage interest rates may have inched above 4 percent, but existing home and condominium sales and prices have not lost momentum, experts say.
The housing market has continued to rebound in Chicago and nearby suburbs this spring and early summer, and sellers have pocketed solid appreciation gains, reported the Illinois Association of Realtors® (IAR).
Some 2,700 homes were sold in May in the city of Chicago, up 10.1 percent from May of 2014 when 2,453 homes were sold. The median price of a home in Chicago was $287,500, up 6.8 percent from $269,250 in May of 2014, the IAR reported.
“We’re seeing a market that is definitely working in favor of sellers,” said Jim Kinney, president of the IAR and vice president for luxury sales at Baird & Warner in Chicago.
“Not only is the time it takes to sell a home down from a year ago, but we are also seeing continued upward movement in the median price for a home,” Kinney said.
“Chicago has seen home buyers enter the market with vigor since February,” noted Hugh Rider, president of the Chicago Association of Realtors® (CAR) and co-president of Realty & Mortgage Co.
“The increase in median prices and the relative lack of inventory compared to a year ago show consumers are comfortable with buying in the city and they believe the investment is worth paying a bit more,” Rider said.
In the nine-county Chicago area, single-family home and condominium sales in May totaled 10,684 units, an increase of 7 percent from the 9,982 units in May of 2014. The median price in May in the Chicago area rose 7.2 percent to $222,000 from $207,000 in May 2014.
“Notwithstanding sluggish employment growth in Illinois, housing sales and prices continue their positive trends,” said Geoffrey J.D. Hewings, a University of Illinois economist. “Of interest, is the upward trend in prices of foreclosed properties that have been sold, although the rate of decline in the foreclosure inventory suggests a long wait before it returns to pre-recession levels.”
Single-family home and condo sales statewide in May totaled 14,980 units, up 5.6 percent from May or 2014 when 14,187 homes sold. The median price statewide in May rose to $182,000, an 8.7 percent gain over $167,500 in May of 2014. The median is a typical market price where half the homes sold for more and half sold for less.
Freddie Mac’s Primary Mortgage Market Survey® reported on July 9th that benchmark 30-year fixed home loans averaged 4.04 percent, down slightly from 4.08 percent a week earlier. A year ago at this time, the 30-year fixed loans averaged 4.15 percent. Fifteen-year fixed mortgages averaged 3.20 percent on July 9th, down from 3.24 percent week earlier. A year ago, 15-year fixed loans averaged 3.24 percent.
“Yields on Treasury securities and mortgage rates declined this week in response to investor concerns about events in Greece and China, said Sean Becketti, chief economist, Freddie Mac.
“Overseas volatility is likely to persist for some time, providing some restraint on potential U.S. rate increases,” Becketti said.
As a result, the Federal Reserve likely will proceed cautiously—monitoring events both overseas and in the U.S. to ascertain the appropriate moment to begin raising short-term interest rates, he said.
“As a result, mortgage rates may remain in the neighborhood of 4 percent for a while,” Becketti predicted.
Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. For more information, visit www.escapingcondojail.com.