Chicago Home Sales Roared Back In Third Quarter Of 2020
Despite the novel virus plague, racial protests, downtown looting and general political unrest, Chicago’s North Side housing market not only survived—but thrived—during the pandemic this summer.
“Home sales activity across Chicago’s North Side roared back to life during the summer months, easily eclipsing the results posted during the same period in 2019,” said Mary Jo Nathan of the Charese Team at the Compass office in Roscoe Village.
“It was surprisingly clear that COVID-19 was good for residential real estate, even if was bad for the economy and thousands of people who contracted the virus as a whole,” Nathan observed.
Record low mortgage interest rates also played a major role in the market rebound. On July 16, 2020, home-loan interest rates nationwide skidded to 2.98%—what was then a historic record low. It was the first time in 50 years that home-loan rates fell below 3%, reported Freddie Mac. Since then, rates have held below 3% for benchmark 30-year-fixed home loans.
On November 5th, benchmark 30-year fixed loans averaged 2.78% nationwide, reported Freddie Mac. A year ago, the 30-year fixed mortgage average was 3.69%. The 2.78% rate is a new record low, the 12th time this year that interest charges hit new lows.
RateSeeker.com reported on November 5th that GateWay Capital Mortgage was quoting 2.756% on a 30-year fixed loan. Mutual of Omaha Mortgage was quoting 2.843% on a similar loan.
According to the Compass quarterly Chicago North Side Market Report, combined sales of detached and attached homes on the North Side rose 10.8% to 2,925 units during the July through September quarter, and the median sales price for a North Side home gained a hefty 12.4% to $399,000.
For the seven-county Chicago metro area, the comparable results for the quarter were a 23.6% increase in sales activity and a 10.9% rise in the median sales price, the Compass report noted.
The North Side Market Report tracks home sales in nine community areas: Edgewater, Lake View, Lincoln Park, Lincoln Square, Near North Side, North Center, Rogers Park, Uptown and West Ridge.
“Demand for single-family homes was especially strong during the third quarter, which helps explain why sales were up so sharply in the outlying portions of the metro area where single-family homes dominate the market,” said Nathan.
“Single-family sales on the North Side increased 19% for the quarter, which compares with a 22.4% increase in all of Cook County.
“The attached townhome and condominium market, which accounted for 2,600 sales—nearly 90% of North-Side transactions—delivered solid but more restrained growth, with sales up 9.8% for the quarter.
At the same time, the median price of attached units gained 11.6%, in part because there was strong demand for larger units that come at higher price points, but also because a lack of inventory in some areas has put upward pressure on prices,” Nathan said.
Sales of detached homes registered their sharpest gains in three community areas: Near North, up 300%; Lincoln Square, up 80%, and Uptown, up 77.8%.
Overall, detached sales rose in eight of the nine communities covered by the North Side Market Report, with only North Center seeing a slight decrease though it also had more detached sales than any of the other North Side areas during the quarter.
Sales of attached homes increased in seven of the nine neighborhoods, led by North Center, where sales rose 63%. However, sales in the city’s largest attached market, the Near North Side, continued to lag, sliding 16.1% for the quarter.
“High-rise properties are not drawing as many buyers during the pandemic because the units often lack the private outdoor space in demand today, and right now buyers can be hesitant to rely heavily on elevators,” Nathan explained.
Nevertheless, the median sales price of an attached home rose in eight of the nine neighborhoods, topped by increases along the lakefront, with the median rising 23.4% in Edgewater, 14.1% in Lake View and 16.4% in Lincoln Park.
Gazing into the future, Nathan stressed how much the North Side market would benefit from additional inventory. Only Lake View, Lincoln Park and Near North are posting more than a three-month supply of listings.