Chicago’s Home And Condo Resale Markets Off To Fast Start
Strong buyer demand during the pandemic kicked Chicago’s home and condominium resale market off to a fast start in January, analysts say.
Residential resales climbed 16.9% to 1,678 units, while the median price rose 15.8% to $310,000, and the average market time dipped 17 days to 85 days, reported Midwest Real Estate Data, the regional multiple listing service. The total inventory of homes for sale increased 7.9% to 7,143 units.
“However, when we look at the detached and attached markets separately, we see some important distinctions,” noted housing analyst Mary Jo Nathan of the Charese Team at Compass Roscoe Village.
Resale home listings scarce
In the detached single-family home segment, inventory fell 46.1% to 1,345 existing-home listings. Despite strong demand for homes, the lack of supply held sales to 714 units, a 7.9% increase over January of 2020.
The median home sales price spiked 21% to $275,000, and average market time decreased by 19 days to 75 days.
“Despite the inventory headwinds, January’s results were exceptional from a historical perspective,” noted Nathan, a North Side residential real estate broker since 2000.
“The median sales price was the highest ever recorded for Chicago in January, while the sales total was the largest and average market time the lowest since 2006, the peak of the housing boom that preceded the Great Recession,” Nathan said.
Condo listings soar
In the housing attached market—which primarily consists of condominiums and town homes—there were 964 city sales in January, up 24.5% from the same month in 2020. The median sales price gained 10% to $345,000, a January record, and average market time shortened by 17 days to 91 days. Attached housing inventory skyrocketed 40.6% to 5,798 units, compared with January of 2020.
“Many condo buyers are also sellers because they are looking for more space now that they are working from home during the pandemic,” Nathan explained. “A significant number of buyers want to move to a single-family home, which helps explain why demand is so strong in that segment.”
Sales hot in the suburbs
As robust as city home sales were in January, the suburbs were even hotter. Sales across the seven-county Chicago metro area were up 22.5% to 7,000 homes, and the median sales price rose 15.8% to $272,000. Average market time was 72 days.
The increases were comparable in both housing segments. Detached home sales up 21.4% and the median price gained 17.9% to $299,900, while attached sales rose 24.7%. The median price increased 10.3% to $215,000.
On February 25th, benchmark 30-year fixed-rate mortgages averaged 2.97% nationwide, up from 2.81% a week earlier, reported Freddie Mac’s Primary Mortgage Market Survey. A year ago, 30-year fixed loans averaged 3.45%. Fifteen-year fixed mortgages averaged 2.34%, up from 2.21% a week earlier. A year ago, the 15-year fixed loans averaged 2.95%.
On February 25th, Gateway Capital Mortgage in Chicago was quoting 2.877% on 30-year loans and 2.5% on 15-year mortgages, reported RateSeeker.com.
The Freddie Mac survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
“Optimism continues as the economy slowly regains its footing, thus affecting mortgage rates,” said Sam Khater, Freddie Mac’s chief economist. “Though rates continue to rise, they remain near historic lows.”
However, when combined with demand-fueled rising home prices and low inventory, “these rising rates limit how competitive a potential home buyer can be and how much house they are able to purchase,” Khater said.