Chicago’s resale home and condominium market continued a slow rebound in 2017 as unit sales and median prices posted gains. However, the Windy City and national housing market still hasn’t totally recovered from the Great Recession, experts say.
The National Association of Realtors reported that 5.51 million existing homes were sold nationwide in 2017, up from 5.45 million units in 2016. However, the nation’s resale-home market still hasn’t rebounded to the level of 6.48 million units sold in pre-crash 2006—more than a decade ago.
New-home sales nationwide in 2017 totaled 608,000 units, up 8.3% from 2016, reported the National Association of Home Builders. However, new home inventory remains low at 295,000 units, a 5.7-month supply. The median new-home price was $335,400 in 2017.
Price gains in Chicago
Illinois Realtors reported that 28,621 existing single-family homes and condos were sold in Chicago in 2017, a 1.8% gain over 28,104 units marketed in 2016. The year-end 2017 median price rose 4.8% to $285,000 from $272,000 in 2016.
Some 2,008 existing homes and condos were sold in December of 2017 in Chicago, up 1.7% from 1,974 units in December of 2016. The median price of a home in the city of Chicago in December of 2017 was $267,500, up 2.9% from $260,000 in December of 2016.
Single-family home and condominium sales in the nine-county Chicago area totaled 118,131 units in 2017, up 1.2% from 116,686 units sold in the region in 2016. In December of 2017 a total of 8,067 homes and condos were sold, down 2.1% from 8,244 units in December of 2016.
The year-end 2017 median price reached $235,000 in the nine-county suburban area, up 5.6 percent from $222,500 in 2016.
In December of 2017 the median price was $225,000 in the nine county Chicago area, an increase of 5.1% from $214,000 in December of 2016.
Sales and price information was generated by Multiple Listing Service closed sales reported by 27 participating Illinois Realtor local boards and associations including Midwest Real Estate Data LLC data.
Shortage of home listings
A shortage of existing home inventory continued to plague the marketplace both in Chicago and the suburban collar counties, Illinois Realtors reported.
“Overall, we saw an active and healthy market in 2017, and are positioned well for the forthcoming spring market,” said Rebecca Thomson, president of the Chicago Association of Realtors. “Buyers should expect to see expanded options on the market in the months ahead, but competition will also remain strong as demand outpaces supply and rates remain low.”
“The Illinois housing market posted a solid performance in 2017,” said Matt Difanis, president of Illinois Realtors. “We finished the year with sales and median prices in positive territory.”
Home-loan rates on rise
Unfortunately for home and condo buyers, mortgage rates are moving higher. On January 25th, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed loans averaged 4.15%, up from 4.04% a week earlier. A year ago at this time, the 30-year fixed loans averaged 4.19%.
Chicago lenders were quoting a range of 4.106% to 4.234% on 30-year fixed loans on January 25th, reported rateSeekers.com.
“Rates keep climbing,” noted Len Kiefer, Deputy Chief Economist for Freddie Mac. “The 10-year Treasury yield reached its highest point since 2014 reflecting expectations of broad-based economic growth.” Mortgage rates, in turn, followed the surge in Treasury yields, Kiefer said. The 30-year fixed-rate mortgage jumped 11 basis points to its highest level since March of last year.
“The forecasts for prices and sales for the first quarter of 2018 remain positive,” said University of Illinois economist Geoffrey J.D. Hewings. “After adjusting for inflation, prices are now 7 percent higher than pre-recession levels statewide and 9 percent higher in the Chicago area.”
Higher rents forecast
With the Chicago property owners scheduled to be hit with hefty real estate tax-assessment increases this spring, city apartment renters likely will face higher rents on expiring leases, apartment managers say.
Nationwide, modest 2% rent increases are forecast for in 2018, according to a U.S. apartment market outlook. However, rent hikes in Chicago’s attractive lakefront neighborhoods likely will be higher.
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.