The era of bargain home prices in Chicago—caused by underwater selling and a rash of foreclosures during the Great Recession—may at last be over, experts say.
The median price of a home in the city of Chicago hit a whopping $306,750 in May of 2017, reported a new survey by Illinois Realtors. That’s a solid 5.5 percent gain over May of 2016 when the median price was $290,750.
Apparently prices are being driven higher because of multiple-bid offers sparked by a shortage of listings. Despite the price boost, Chicago saw a 0.2 percent year-over-year home sales decline in May of 2017 with 2,973 sales, down from 2,980 in May of 2016.
“We’re in an interesting, sophisticated market at present, wherein inventory is restricting what’s available for those who are looking to buy,” said Matt Silver, president of the Chicago Association of Realtors.
“Sellers are having to price their properties appropriately,” Silver said. “Educated buyers are prepared to be flexible on their wants and needs in a new home. Or they have to be willing wait for the perfect home to come on the market and pay accordingly.”
In the nine-county Chicago area, single-family home and condominium transactions in May of 2017 totaled 12,491 units sold, up 5.1 percent from May of 2016 when 11,884 units were marketed.
The median price in May of 2017 was $246,900 in the Chicago area, an increase of 5.6 percent from $233,900 in May of 2016. The median is a typical market price where half the homes sold for more and half sold for less.
Sales and price information are generated by Multiple Listing Service closed sales reported by 28 participating Illinois Realtor local boards and associations, including Midwest Real Estate Data, LLC.
Statewide sales of single-family homes and condominiums totaled 17,077 units in May of 2017, up 3.8 percent from 16,450 units in May of 2016.
The statewide median price in May of 2017 was $209,000, up a hefty 8.3 percent from May of 2016, when the median price was $193,000.
“Buyers in 2017 are running headlong into a tight market, with nearly 10,000 fewer homes on the market statewide than there were in May of 2016," said Doug Carpenter, president of Illinois Realtors President Doug Carpenter.
“Rising prices show sellers are being rewarded for listing in a market that in many areas has been marked by multiple offer situations,” Carpenter observed.
The time it took to sell a home in May of 2017 averaged 52 days, down from 59 days a year ago. Available housing inventory totaled 56,535 homes for sale, a 14.9 percent decline from May 2016 when there were 66,424 homes on the market.
Another bonus for home buyers is relatively low mortgage rates. Benchmark 30-year fixed mortgage rates continuing to hold at year-to-date lows amidst ongoing economic uncertainty, reported Freddie Mac’s Primary Mortgage Market Survey.
The 30-year fixed loan rate averaged 3.90 percent for the week ending June 22, 2017, down from 3.91 percent a week earlier. A year ago at this time, the 30-year fixed loan averaged 3.56 percent.
“The housing market appears to be in a ‘wait-and-see’ mode in both Illinois and Chicago” said economist Geoffrey J.D. Hewings of the University of Illinois. “The state’s economy has stuttered and the fiscal cloud hanging over the state has seen enhanced net out-migration that has contributed to a dampening of demand.”
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.