Home and condominium hunters had better put on their jogging shoes and move quickly when heading to North Side open houses this spring.
Chicago Realtors report that a shrinking number of affordable for-sale home and condo listings is sparking multiple offers and above-asking prices.
“Well-priced condo units in hot North Side neighborhoods such as Bucktown, Wicker Park, Ukrainian Village, and Logan Square are drawing crowds of shoppers and dozens of offers,” said veteran Realtor Sara Benson, president of Chicago-based Benson Stanley Realty.
“Serious buyers should be fully approved for a mortgage, bring their check book to every showing, and be ready to pay an average of 5 percent to 10 percent more than the asking price in multiple-bid situations,” Benson advised.
“Inventories plummeted in February, no doubt frustrating some potential buyers but creating opportunities for the sellers who did have properties on the market,” noted Doug Carpenter, president of the Illinois Realtors®.
The median price of single-family homes and condominiums in Chicago rose a solid 4.2 percent to $246,000 in February, compared with $236,000 in February of 2016, reported the Illinois Realtor’s latest survey.
However, because of high demand and a shortage of listings the number of homes sold declined 4 percent to 1,505 units from 1,567 units in February of 2016.
“As we move into the spring, more properties should come on the market, but it will take some time for supply and demand to find equilibrium,” Carpenter said.
A total of 5,891 single-family homes and condominiums were in sold in February in the nine county Chicago area, a decline of 5.2 percent over the 6,214 units sold in February of 2016. However, the median price skyrocketed 12 percent to $210,000 from $187,500 in February of 2016.
“We’re in an active sales environment,” said Matt Silver, president of the Chicago Association of Realtors®. “We are seeing listings offered in advance of the spring market, with condos, in particular, benefitting from increased consumer confidence.”
Silver said the recent interest-rate hike by the Federal Reserve Board, which pushed home-loan rates higher, sparked a rise in consumer demand and prices.
Benchmark 30-year fixed home loan rates averaged 4.23 percent on March 23rd, down slightly from 4.30 percent a week earlier, reported Freddie Mac’s Primary Mortgage Market Survey. A year ago at this time, 30-year fixed loan rates averaged 3.71 percent.
“The 10-year Treasury yield fell about 10 basis points last week,” noted Sean Becketti, chief economist of Freddie Mac. “The 30-year mortgage rate moved with Treasury yields and dropped 7 basis points to 4.23 percent.”
This marks the greatest week-over-week decline for the 30-year mortgage rate in more than two months, a stark contrast from the jump following the Fed’s rate increase, Becketti said.
“The hot stock market and higher wages also are sparking an increase in home and condo prices and could lead to a rapid decline in market time in the months to come,” Silver predicted.
Statewide, single-family home and condominiums sales totaled 8,461 units in February, down 2.8 percent from 8,704 units in February of 2016, the Illinois Realtors reported.
The median price was $170,000 statewide in February, up 6.3 percent from $160,000 in February of 2016. The median is a typical market price where half the homes sold for more and half sold for less.
The time it took to sell a home statewide in February averaged 74 days, down from 81 days a year ago. However, available housing inventory totaled only 51,227 homes and condos for sale, a 14.9 percent decline from February 2016 when there were 60,168 units on the market.
“Prices continue to move higher,” said Geoffrey J.D. Hewings, an economist at the University of Illinois. “While consumer confidence reflects optimism about the economy, the housing inventory continues to shrink suggesting that while more optimistic, many homeowners are not yet tempted enough to consider moving to a larger or more expensive home.”
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.