Condo Resales Spark Record 2021 Housing Market In Chicago
Looking back, 2021 was a year of chaos—rampant pandemic viruses, downtown looting, more than 800 murders and accelerated crime in the Windy City.
However, amid all the gun smoke and carnage, city real estate brokers put the peddle to the metal and quietly produced a residential real estate boom.
Rock-bottom mortgage rates, a strong rebound in condominium sales and plenty of hard work by brokers in 2021 sparked a record year for North Side residential real estate.
Total North Side home sales in nine key neighborhoods hit record volume of 12,882 units in 2021, a whopping gain of 42.2% compared with 2020, reported broker Mary Jo Nathan of the Charese Team at Compass Roscoe Village. Nathan’s quarterly Chicago North Side Market Report noted that 2021 sales volume rose 12.3% to 2,491 units in the fourth quarter alone.
Those results for the North Side, compare with an annual sales gain of 27.6% for the city as a whole, and an increase of 6.2% in the fourth quarter, set the tone for a record year.
“The 2021 home sales on the North Side were the highest for the area since at least 2007,” noted Nathan. “That’s as far back as our data allows us to look, but I think it is probably an all-time record for sales because so much of the volume today involves condominium units that didn’t exist 30 years ago.”
Record-low mortgage rates helped spark the boom. In June of 2021, lenders were quoting 2.99% on average 30-year fixed home loans nationwide. On January 20th, lenders were quoting 3.56% on benchmark 30-year fixed loans, reported Freddie Mac.
The North Side Market Report tracks home sales in Edgewater, Lake View, Lincoln Park, Lincoln Square, Near North Side, North Center, Rogers Park, Uptown and West Ridge.
There were significant differences between the North Side market results for detached single-family homes and those for attached homes, a category covering condominium, town homes and co-op apartments.
For the entire year, detached home sales rose 27% to 1,298 units, and the median price gained 19.4% to a whopping $1,170,000, marking the first time that the North Side median sales price of single-family homes topped the $1 million mark for a full year.
However, fourth quarter sales of detached homes slumped to 269 units, down 10% from the same period in 2020, but the median sales price gained 14.8% to a hefty $1,165,000.
Average market time for homes sold during the quarter was 59 days—34 days less than a year earlier.
“The sharp fall in average market time reflects the shortage of homes for sale,” said Nathan. “There were just 124 homes for sale on the North Side at year’s end, which is 51.4% fewer than at the end of 2020.”
Surprisingly, five community areas each had fewer than 10 homes on the market on December 31st, including North Center, which had 276 sales for the year and ranked second in total single-family sales among the nine North Side communities.
Inventory was less of a concern in the condo market although the inventory of attached homes for sale at the end of the year was down 40.6% from its level 12 months earlier, Nathan reported.
Attached sales for all 2021 totaled 11,584 units, 44.1% more than in 2020, while fourth-quarter sales rose 15.7% to 2,222 units.
The median attached-home sales price for the quarter was $355,000, an increase of just 0.8% over the same period in 2020. The full-year median sales price of $355,000 was down 1.2%.
“We shouldn’t be fooled by the slight dip in attached-home prices this year because we’re comparing 2021 to 2020, when attached home prices hit record highs on the North Side and as a whole were up 8.9% over 2019,” said Nathan.
The most noteworthy trend has been the rebound in condo and town home sales on the Near North Side,” she said. “Attached home sales there were up 56.4% for the full year and 40.9% in the fourth quarter,” Nathan said. “That suggests the Near North condo market has recovered nicely after slowing substantially in 2020 when the pandemic arrived.”
The market was also broadly upbeat in Uptown, where total 2021 sales activity rose 40.4% in attached homes and 15% in detached units, with both categories seeing their highest number of unit sales since at least 2007.
The Lincoln Park market also set fourth-quarter records for sales volume in both categories, with detached home sales climbing 14.5% to 71 units and attached-unit sales up 21.2% to 331 units.
In contrast, Lincoln Square saw sales activity dip in both categories when compared to exceptionally strong 2020 results. Detached sales fell 41.7% to 21 units; attached sales were off 18.4% to 80 units.
As for home prices, the fourth quarter results were more consistently positive in the detached category, with seven of the nine communities registering median price increases.
Leading the way were Near North with a 135.2% increase to $2,350,000 on just nine sales. Edgewater posted a 49.5% increase to $970,500 on 22 sales, and Uptown racked up a whopping 48.7% increase to $1,228,250 on 14 sales.
Conversely, the fourth quarter’s attached median price was up in just three of the nine North Side areas. Lincoln Park led with a 5.3% increase to $553,000, followed by North Center with an increase of 4.5% to $470,000. The Near North saw its attached median climb 3.7% to $425,000.