Don’t Pay Too Much For Homes On Chicago’s North Side
Chicago’s spring existing-home market on the city’s North Side truly is the wackiest housing observers have seen in decades.
“It’s a strong seller’s market on the North Side with multiple offers the rule, but buyers should be careful not to overpay because of the low-inventory bubble,” advised John Irwin, broker with Baird & Warner.
“On the Near North Side, home sales and units under contract have rebounded nicely, however inventory levels are still growing at alarming rates—up 44.1% in April in the Loop, Streeterville, Gold Coast and River North,” noted Irwin, author of the May 2021 Market Analysis for Chicago’s North Side.
Apparently, Near North home and condominium sellers are still worried about last year’s looting and civil unrest downtown, and the negative impact of the Covid-19 virus on high-rise living.
On the positive side, overall existing home and condo inventory was up 19.2% in April on the entire North Side.
However, prospective buyers seeking a residence in Lincoln Park and North Center will have to shop hard. The inventory level in Lincoln Park declined 7.2% in April, and it plummeted 22.8% in North Center.
The Baird & Warner analysis posted the following median price points in April:
Near North Side. The median price was $435,000, up 4.8% from April of 2020.
Lincoln Park. The median price spiked 10% in April to $577,750, compared with a year ago.
Lake View. The median price fell 1.3% to $440,500 from April of 2020.
North Center. The median price was $5,000, up 3.9% from the same month a year ago.
Mortgage rates fall again
Affordable home-loan rates in recent weeks also buoyed the market. Freddie Mac’s Primary Mortgage Market Survey reported on May 13th that benchmark 30-year fixed home loans nationwide slipped to 2.94%, down from 2.96% a week earlier. A year ago, the 30-year fixed-loan average was 3.28%.
Fifteen-year fixed mortgages averaged 2.26%, down from 2.30% a week earlier. A year ago, the 15-year fixed loan average was 2.72%.
The Freddie Mac survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
In Chicago on May 13th, Rate Rabbit Home Loans was quoting 2.849% on a 30-year fixed mortgage with a down payment of 20% and a loan fee of $1,900, reported Rate Seeker.com.
Gateway Capital Mortgage was quoting 2.877% on 30-year loans and 2.125% on 15-year loans with a 5% down payment. The loan fee was $595.
“Since the most recent peak in April, mortgage rates have declined nearly a quarter of 1 percentage point and have remained under 3% for the past month,” noted Sam Khater, Freddie Mac’s Chief Economist.
“Low rates offer homeowners an opportunity to lower their monthly payment by refinancing and our most recent research shows that many borrowers, especially Black and Hispanic borrowers, who could benefit from refinancing still aren’t pursuing the option.”
While the low mortgage-rate environment has been a boon to the housing market, Khater predicted it may not last long.
“Consumer inflation recently has accelerated at its fastest pace in more than 12 years and may lead to higher mortgage rates in the summer,” Khater warned.