Home Prices On The Rise In Chicago’s North Side Market
The roller-coaster ride for home buyers and sellers on Chicago’s North Side in 2023 continues, but the market has not jumped the tracks, according to a new market analysis.
The bad news is May was the 15th consecutive month of year-over-year home sales declines in Lincoln Park, Old Town, Lakeview, North Center, the Gold Coast and Near North Side.
“Historically low inventory and listing levels and strong buyer demand continue to make this market as frustrating as it is promising,” noted Realtor John Irwin, co-author of Baird & Warner’s June 2023 Market Analysis with broker Jackie Lafferty.
“While we have experienced more than a year of home sales declines, May of 2023 represented the second consecutive month of median home-price increases,” Irwin said. “Home prices on the North Side have been one of the most interesting and perplexing aspects of the current market.”
Baird & Warner’s June analysis also noted that North Side home prices have remained fairly stable in comparison to the Chicago-area suburbs and other parts of the nation.
“The North Side market posted a solid 8.5% overall price increase in May when compared with the same month a year ago, and today prices are now even with year-to-date numbers from 2022,” Irwin said. In April, median prices squeaked out an increase of only 0.3% on the North Side.
Lincoln Park and Old Town home prices rose a solid 11.2% in May, compared with last year. North Center posted a robust 24.5% gain compared with 2022. Both of these hot neighborhoods have experienced slow but consistent price growth since 2020 and Covid, Baird & Warner noted.
Home prices in Lakeview have been flat during the same time period. The Gold Coast and Near North Side has had a more difficult time with pricing, according to Baird & Warner’s analysis. Prices on the Near North Side slipped 6% in May.
“The Near North Side offers buyers more of a choice of homes, keeping prices competitive,” Irwin said.
“However, two months of price increases on the North Side does not necessarily indicate a trend, and sellers should note that the current pricing data is not a license to overpriced their home,” Irwin advised.
“Pricing your home for sale should included comparable properties along with price per square foot of living area and appreciation analysis from your specific neighborhood,” he explained.
The past few months have shown that many prospective buyers will compete in multiple-offer scenarios, but “they will not get involved in over-priced bidding wars,” Baird & Warner analysis noted.
On June 4th, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home loans averaged 6.71% nationwide, down slightly from 6.79% a week earlier. A year ago, lenders were charging an average of 5.23% for 30-year fixed loans. Fifteen-year fixed loans averaged 6.07% on June 4th, down from 6.18% a week earlier. A year ago, the 15-year average was 4.38%.
The Freddie Mac survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
“Mortgage rates decreased on June 4th after a three-week climb,” said Sam Khater, Freddie Mac’s chief economist. “While elevated rates and other affordability challenges remain, inventory continues to be the biggest obstacle for prospective home buyers.”