Buyers Should Get Combat Pay For Flying Into 2022 Market
Buying a home during the 2022 pandemic was like flying through flack without a parachute in the middle of a war.
After mortgage rates soared, Chicago’s North Side housing market cooled sharply in the second half of last year, following 24 months of exceptional sales activity, according to the 2022 Baird & Warner North Side Market Report.
Pity the typical buyer who faced the headwinds of a giant leap in home-loan interest rates in the early months of 2022. Benchmark 30-year fixed mortgage rates soared from about 3.5% to more than 5.7% between February and June. Rates peaked in November at 7.08%, and have modified into the low 6% range today.
Nonetheless, home prices softened only modestly even as sales activity saw substantial declines.
North Side home sales in 2022 as whole totaled 10,872 units, which was -15.6% less than in 2021, and fourth-quarter sales total of 1,638 units was off -34.2% from the comparable period in 2021, Baird & Warner reported.
Home prices remained fairly resilient, with the median price of all attached and detached sales coming in at $390,000 for the full year, a minimal increase of 0.6% over the 2021 result. However, in the final quarter of 2022, the median price was -9% lower than the same period of 2021.
Prepared quarterly by Mary Jo Nathan of Baird & Warner’s office at 4037 N. Damen in North Center, the Chicago North Side Market Report tracks sales of single-family and attached homes in the neighborhoods of Edgewater, Lake View, Lincoln Park, Lincoln Square, Near North Side, North Center, Rogers Park, Uptown and West Ridge.
“The pandemic sales boom on the North Side produced 24,611 sales between July 1, 2020, and June 30, 2022,” reported Nathan. “In comparison, the two years prior to the pandemic, 2019 and 2018, saw 19,395 home sales in the same area.”
That translates to a pandemic-fueled increase of 26.9%, which is logically fading now as the market returns to more normal conditions and digests significantly higher interest rates, Nathan said.
A continued shortage of inventory helped home prices remain relatively steady. North Side listing inventory totaled 1,635 units at the end of 2022. That is -21.3% below the 2021 year-end number.
That shortage helps explain why even as fewer homes were sold, they were selling at a brisk pace. Average market time for North Side homes was 69 days for the full year and 70 days in the fourth quarter, both about two weeks less than the comparable figures for 2021.
The attached home market—primarily townhomes and condominiums and co-operative apartments—posted a sales decline of -15% for the year to 9,846 units. That still was the second largest annual total in this category over the past 15 years.
The median price of an attached North Side home rose 1.1% for the full year to $359,000, while the median price in the fourth quarter slipped -8.5% to $325,000. Average market time was 70 days for the full year and 71 days in the final quarter.
The performance of this segment was impacted by a continued shrinkage in the inventory of attached homes for sale, which was -23.2% lower at the end of 2022 than it had been a year earlier.
While 2022 attached sales were down in all nine community areas covered by this report, the smallest decline occurred in the largest market. Near North Side sales fell -7.1% from 2021, and that area accounted for 28.6% of total North Side attached sales. All the other areas reported sales declines between -13.8% and -23.3%.
Median attached home prices were relatively stable for the year, rising a bit in Lincoln Park, Lincoln Square, Uptown and Near North, and topped by a 5.1% increase in North Center. The median declined slightly in Edgewater, Lake View and West Ridge, with Rogers Park recording the largest drop at -4.75%.
Sales of single-family homes across the North Side and fell -39.4% in the fourth quarter and declined -21% for the year to 1,026 units. That annual total topped the 2019 sales total and precisely equaled that of 2018.
The median sales price for the full year rose 6.8% to $1.25 million, while the fourth quarter median of $1,076,000 represented a -7.6% decline.
Sales of single-family homes fell in all nine neighborhoods. The best results were recorded in Lincoln Square, with a decline of -5.8%. Sales volume in Edgewater slipped -16%, while Lake View transactions fell -16.9%. Sales declines in Lincoln Park, Near North, North Center, Rogers Park, Uptown and West Ridge ranged from -20.4% to -30.6%.
The top communities for total sales were Lincoln Park with 230 units and North Center with 209 units. Median prices rose in eight of the nine neighborhoods:
Near North. Single-family home prices increased a solid 13.5% to $2.1 million.
Lake View. Home prices posted a strong gain of 12.7% to $1.55 million.
Uptown. Home prices rose 10.9% to $1.175 million.
Edgewater. Home prices rose slightly 0.4% to $908,750.
Lincoln Park. Home prices posted a slight 1% gain to $1,727,500.
Lincoln Square. Home prices slipped -1.4% to $825,000.
North Center. Home prices increased 7.1% to $1,250,000.
Rogers Park. Home prices rose 8.3% to $617,500.
West Ridge. Home prices increased 8.1% to $464,500.
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.