Single-Family Homes Scarce In Chicago’s Red-Hot Market
Chicago’s red-hot spring housing market is continuing to roll into summer despite lingering effects of the COVID-19 pandemic.
There were 3,395 sales of attached and detached homes in Chicago during May, the highest number for the month since 2006 and a whopping 103.2% increase over the same month last year when the pandemic lockdown sharply depressed housing activity, according to Midwest Real Estate Data (MRED), the regional multiple listing service.
The median sales price for May was $350,000—11.8% higher than a year ago—and the highest ever recorded in May. The average time to sell a home listing in May was 72 days, 11 days less than in May of 2020.
The total listing inventory of homes for sale in Chicago increased 4.5% to 7,252 units. The inventory of attached homes—condominiums, townhomes and co-operative unit—soared 22.5% to 5,756 units.
However, inventory of traditional detached single-family homes plummeted by 33.3% to only 1,496 units.
“That translates into a 1.47-month’s supply of detached homes at the May sales pace,” noted Mary Jo Nathan of the Charese Team at Compass Roscoe Village, who analyzed the MRED housing market numbers. Nathan has specialized in North Side residential real estate since 2000.
“Even so, Chicago’s detached-home market turned in solid results, with 1,015 sales closed in May, representing a 40.8% increase over the same month a year ago and just a -4.1% dip from the total in May of 2019. May sales of attached homes were up 150.5% from the year-earlier level to 2,380 units, accounting for a hefty 70.1% of all city sales.
“Last year, attached sales shrank substantially in May as a result of the pandemic lockdown, which in part explains the huge increase we saw this year,” said Nathan. “Sales of high-rise units were especially hard hit in 2020, but that segment is doing much better now.”
Competition for homes in good condition remains intense citywide, and many are selling for more than their list price, she noted. Some sell through the private listing network even before they are officially listed in the MLS.
The trends seen in the city were also evident across the seven-county Chicago metropolitan area. Metro sales in May were up 67% to 12,635 homes compared with May of 2020, and the median sales price rose 19.4% to $314,000. Average market time was 49 days.
Detached home sales were up 45.5%, and the median price gained a solid 25% to $350,000, while attached sales rose 112.7%, and the median price increased 15.9% to $250,000. As was the case in the city, the detached-home inventory contracted sharply from the year-earlier figure, shrinking -53.1% to 7,484 homes, Nathan said.
Mortgage rates inch lower
Affordable home-loan rates in recent months also buoyed the market. Freddie Mac’s Primary Mortgage Market Survey reported on July 1st that benchmark 30-year fixed home loans nationwide slipped to 2.98%, down from 3.02% a week earlier. A year ago, the 30-year fixed-loan average was 3.07%.
Fifteen-year fixed mortgages averaged 2.26%, down from 2.34% a week earlier. A year ago, the 15-year fixed loan average was 2.56%.
“Low and stable mortgage rates have kept the housing market booming over recent months,” said Sam Khater, Freddie Mac’s chief economist.
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 July 1, Gateway Capital Mortgage was quoting 2.778% on 30-year loans and 2.125% on 15-year loans with a 3% down payment, reported Rate Seeker.com. The loan fee was $595.
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.