Despite affordable mortgage rates, the doldrums of summer apparently are keeping the Chicago housing market in slumber.
The city of Chicago saw year-over-year single-family home and condominium sales decrease 7.7% with only 2,543 transactions posted in August, compared with 2,754 deals in the same month a year ago, reported Illinois Realtors.
However, the median price of a home in Chicago rose a solid 3.5% to $289,900 in August, compared with $280,000 in August of 2018.
“There’s some hesitancy among consumers right now, with concerns regarding the yet-to-be-unveiled city budget, continued talks of a market downturn and ongoing international trade wars,” said Tommy Choi president of the Chicago Association of Realtors and broker at Keller Williams Chicago based in Lincoln Park.
“The data reflect that the market has stabilized, and opportunities are still there, particularly as historically low mortgage rates persist,” Choi observed.
On September 26th, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home-loan rates averaged 3.64% nationwide, down from 3.73% a week earlier. A year ago, 30-year fixed loans averaged 4.72%. In Chicago, rates on benchmark 30-year fixed home loans ranged from 3.575% to 3.731% on September 26th, reported RateSeeker.com.
The national rate decrease followed the September 19th the Federal Reserve Board cut of its benchmark federal funds rate a quarter of 1 percentage point to a range of 1.75% to 2%.
“Market time is down, suggesting buyers who are looking to purchase continue to act quickly, and median sales price has ticked up, so they’re willing to pay for what they want,” Choi said. “Those in the market, but on the fence, will benefit from trusting their Realtor to understand pricing strategy and negotiation tactics.”
“The City of Chicago is holding strong on median sales price with a 4% increase over last year, despite a more than 7% dip in the number of homes sold,” noted Realtor Hasani Steele of RE/MAX Premier. “Buyer increase in patience, especially if they already own, is in line with the increase of average market time.”
In the nine-county Chicago Metro Area, single-family home and condo sales in August totaled 11,008 units, down 6.6% from August of 2018 when 11,785 units were sold. The median price in August was $252,000 in the Chicago Metro Area, an increase of 3.9% over $242,500 in August of 2018.
Sales and price information are generated by Multiple Listing Service closed sales reported by 27 participating Illinois Realtor local boards and associations including Midwest Real Estate Data LLC data.
Statewide, a total of 15,716 homes and condos were sold in August, down 6.7% from 16,852 units in August of 2018. The statewide median price in August was $214,000, up a hefty 7% from August of 2018, when the median price was $200,000.
(The median is a typical market price where half the homes sold for more and half sold for less.)
“Illinois saw a surge in median prices in the final month of summer,” noted Ed Neaves, 2020 Illinois Realtors president. “The resulting dip in inventory and sales numbers on an annual basis tell a tale of a market that is struggling to meet consumer demand in many areas as prospective homeowners scramble to take advantage of lower interest rates.”
The time it took to sell a home in August statewide averaged 45 days, unchanged from a year ago. Available inventory totaled 60,149 units for sale, a 5.1% decline from 63,389 units in August of 2018.
“While long-term consumer sentiment on the housing market remains positive, the short-term outlook is cloudy,” said Geoffrey J.D. Hewings, a University of Illinois economist.
“However, the Fannie Mae housing purchasing index remains strong in large part from expectations of declines in interest rates,” Hewings said. “Thus far, the impact on the Chicago and Illinois housing markets has been muted with modest price increases expected to continue.”
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.