Home Buying In Chicago This Spring Should Be More Affordable
With prices easing and mortgage interest rates on a downward slide, buying a home in Chicago this spring may be more affordable than it has been for months, housing experts say.
The median price of an existing home in the city of Chicago in January was $252,000, down 4.9% from $265,000 in January of 2018, reported a new survey by Illinois Realtors. Chicago also saw year-over-year home sales decrease 19.4% with 1,164 units changing hands in January, compared with 1,444 units in the year-ago month.
While home prices slipped in Chicago, so did mortgage rates. On February 21st, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home loans averaged 4.35% down from 4.37% a week earlier. A year ago, the 30-year fixed loan average was 4.40%.
“Mortgage rates fell for the third consecutive week, continuing the general downward trend that began late last year,” said Sam Khater, Freddie Mac’s chief economist.
Chicago-area lenders were charging a range of 4.256% to 4.444% on 30-year fixed-rate mortgages on February 21st, reported rateSeeker.com.
“Consumer confidence throughout the U.S. declined in December and January, due to the government shutdown, the slowing rate of job growth and overall uncertainty about the direction of the economy,” said Tommy Choi, president of the Chicago Association of Realtors.
“This resulted in declines in closed home sales for January. Sellers responded by lowering prices slightly to incentivize cautious buyers, who are regaining some power,” Choi said.
“The slower market is not a cause for concern, as market changes are a natural part of the real estate cycle.”
In the nine-county Chicago Metro Area in January, single-family home and condominium sales totaled 4,526 units, down 22.9% from 5,867 units in January of 2018. The median price in January was $224,000 in the Chicago Metro Area, a slight increase of 0.4% from $223,000 in January of 2018.
“The year-over-year decline in sales continued in both Illinois and Chicago, but this decline was matched by a small drop in prices,” said Geoffrey J.D. Hewings, an economist at the University of Illinois.
“This slippage in both sales and prices may signal the impact of declining consumer confidence and the effects of the government shutdown. Research indicates this could set the state up for additional price decreases in February and March.”
Statewide single-family home and condo sales in January totaled 6,761 units, down 19.4% from 8,385 units in January of 2018.
After years of gains, the statewide median price slipped 0.3% to $182,000 in January, down from $182,500 in January of 2018. (The median is a typical market price where half the homes sold for more and half sold for less.)
“Buyers may finally be beginning to gain some advantage as we enter the run-up to the spring market,” said Ed Neaves, president-elect of Illinois Realtors.
“As inventory declines level off, buyers are likely to find more options to choose from, easing what has been a chronic market challenge in the past few years,” Neaves said. The time it took to sell a home in Illinois in January averaged 62 days, down from 64 days a year ago. Available inventory totaled 47,470 homes and condos for sale, a 1% decline from 47,949 units in January of 2018.
Sales and price information for the survey was generated by Multiple Listing Service closed sales reported by 27 participating Illinois Realtor local boards and associations including Midwest Real Estate Data LLC.
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.