Chicago’s resale home, townhouse and condominium market continues to slowly dig its way out of the Great Recession, which began a decade ago.
More homes were sold nationwide in July than in that month in nearly a decade since the Great Recession began, according to a new report by the U.S. Census Bureau. While the Chicago-area is still in recovery mode, many other cities across the country are doing much better, experts say.
RE/MAX Northern Illinois reported that Chicagoland home sales totaled 11,802 units in August, up 8 percent from the 10,900 units sold in August of 2015.
The median sales price rose to $231,806, a 5-percent gain over August a year ago. The average market time for a home sold in August was 76 days—the lowest figure for August since 2005, the year before the housing market crashed.
Chicago and Cook County accounted for 55 percent of all August home sales in the nine-county Chicago area. Unit sales in Cook County gained 7 percent while the median sales price climbed 3 percent to $235,000.
In August, 1,048 detached single-family homes were sold in Chicago, a gain of 7 percent over the same month a year ago, according to RE/MAX. However, median sales prices gained only 1 percent. Sales of condos, co-ops and townhouses accounted for 1,748 units, up 2 percent over August of 2015.
“The increase in home sales was particularly encouraging in light of the fact that a relative shortage of inventory continues to be an issue for the Chicago-area housing market,” explained Jack Kreider, executive vice president and regional director of RE/MAX Northern Illinois.
“The inventory of homes for sale was 10 percent lower at the end of August than it had been a year earlier. That limited inventory certainly helps explain why homes are selling so quickly right now.”
Kreider also noted that the Chicago-area housing market continued to burn off its backlog of distressed homes. In August, distressed sales, which include foreclosures and short sales, represented only 12.2 percent of the all home sales. Two years earlier, distressed sales accounted for 20.4 percent of the total.
The home sales data used for the RE/MAX analysis is collected by Midwest Real Estate Data (MRED), the regional multiple listing service. It covers detached and attached homes in Chicago and the Illinois counties of Cook, DuPage, Kane, Kendall, Lake, McHenry and Will.
Despite the positive spin put on Chicago-area housing numbers by Realtors, the truth is the local market is far from robust by national standards.
WalletHub, the personal-finance website, conducted an in-depth analysis comparing 300 U.S. cities across 16 key metrics. The data set ranges from “median home-price appreciation” to “housing affordability” to “job growth rate.”
The ranking on the health of Chicago’s residential real estate market follows (a score of 1 is best, 150 is average and 300 is the worst):
• For the percentage of underwater homes with negative equity, Chicago ranks 281st among 300 markets nationwide.
• In median home-price appreciation, the Windy City ranks 213th in the nation.
• For the average number of days a home sits on the market until it is sold, Chicago ranks 213th.
• The Windy City ranks 212th in foreclosure rate and 191st in mortgage holders in delinquency.
• Chicago is in 252nd place in REOs—number of unsold homes owned by banks.
• When it comes to home price as a percentage of income, the Windy City is in 200th place.
• For job-growth rate, Chicago ranks in 198th place.
• Chicago’s unemployment rate puts the city in 253rd place.
• The population growth rate ranks Chicago in 281st place.
Chicago may be a “world-class” city, but its residential real estate market ranks 256th overall and 53rd among large cities, according to WalletHub. For the full report, visit: https://wallethub.com/edu/best-real-estate-markets/14889/
For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.