The Great Recession’s downward push on existing home, townhome and condominium prices in the Chicago area finally has ended, experts say.
In the first half of 2018 the median sales price of homes, condos, co-operative apartments and townhomes in the seven-county Chicago metro area rebounded to the high ground it attained before the housing crash, according to a new report by RE/MAX of Northern Illinois.
Between January and June of 2018, the median home-sales price in the Chicago area hit $250,000, equaling the median price for the same period in 2006 and 2008 and falling just $4,000—or 1.6%—below the 2007 figure, RE/MAX reported.
The median home sales price in 2018 rose 4.2% over the median price in the first half of 2017. However, home-sales activity in the Chicago area declined 3.4% to 56,285 units in the first half of 2018. Sales of detached homes reached 35,147 units, while some 21,138 condos, co-ops and townhomes were sold.
Home-loan rate creep
This strong home-sales activity occurred during a period of interest-rate creep, analysts said. On July 19th, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home-loan rates averaged 4.52% percent. At the beginning of 2018, the 30-year fixed loan rate averaged 3.95%. A year ago at this time it averaged 3.96%.
On July 19th Chicago-area lenders were charging a range of 4.256% to 4.484% on 30-year fixed-rate mortgages, reported rateSeeker.com.
In Chicago, total detached and attached home sales reached 14,172 units in the first half of 2018. Condo, co-op and townhome sales accounted for 8,796 units, while 5,376 traditional detached single-family homes changed hands.
Modest Chicago condo price gains
Chicago recorded both the smallest decline in condo, co-op and townhome sales—just a 0.5% drop in unit sales—and the narrowest increase in median price, a modest gain of 1.7%. (The median is a typical market price where half of the homes sold for more and half sold for less.)
In Cook County, total detached and attached home sales reached 31,155 units in the first half of 2018. Home sales accounted for 16,677 units, while 14,478 condos, co-ops and townhomes changed hands.
The first half of this year has been challenging for home buyers and real estate brokers in the Chicago area, especially entry-level properties priced at up to $300,000 said Jeff LaGrange, vice president of RE/MAX of Northern Illinois.
“Sales of homes priced under $300,000 were down 7.2% in the first half of the year. At the same time, the number of homes selling for more than $300,000 rose by 2.6%, LaGrange said. “The major reason for the difference is that the supply of homes priced at $300,000 or more is considerably larger, relative to demand, than is the supply of lower priced homes.”
“Unfortunately, we don’t expect much relief from the tight home-inventory conditions plaguing Chicago and many other markets,” said Sam Khater, Freddie Mac’s chief economist.
RE/MAX reported that the average market time, which is the length of time a home is listed for sale but has yet to go under contract, was also lower across the metro area—80 days this year, versus 87 days a year ago.
The number of homes for sale on June 30th was 1% higher, but listings of single-family homes declined 2.7% from the year-earlier number. The 34,040 homes on the market equaled a 2.6-month supply based on the pace of June sales.
However, the inventory picture does have a bright side. “The supply of condos, co-ops and townhomes now 11% higher than it was a year ago,” LaGrange said.
Metro Chicago Sales in June
Metro Chicago home sales in June of 2018 totaled 13,155 units, a decline of 5.8% from June of 2017. The median sales price for the month was $265,000, a gain of 3.9%. Sales of single-family homes fell 5.7%, while the number of condos, co-ops and townhomes sold declined 5.9%.
The home sales data used for the RE/MAX analysis is collected by Midwest Real Estate Data LLC, the regional multiple listing service. It covers detached and attached homes in Cook, DuPage, Kane, Kendall, Lake, McHenry and Will counties.
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.