Welcome to "How's The Market?"
This month in the news: The U.S. unemployment rate hit its lowest mark since December 1969, at 3.7 percent. The economy continues to show healthy signs of growth and the Federal Reserve has recently reacted by raising the benchmark rate by a quarter of a percentage point, which was the third time it did so in 2018.
However, according to Chicago Crains Business News, home sales in the Chicago area in September took their biggest downturn in 7 years.
According to the data reported by Illinois Realtors, sales of homes in Chicago were down 16.6 percent in September from a year earlier. That's the steepest decline in sales of any month since May 2011, when sales were down 17 percent. The decline in Chicago is considerably steeper than the national numbers. Nationwide, home sales were down 3.4 percent in September, according to a report released today by the National Association of Realtors.
The declines may be a result of the same factors that drive the economy: prices, mortgage rates and property taxes are all going up. In addition, the change in the federal tax code this year limit the deductions for mortgage interest and property taxes.
Let's take a closer look at how the market affected the sales in some popular Chicago neighborhoods.
Gold Coast, Streeterville and River North
In September, active listings were up by 18% and closed sales were down by 11%, compared to the same time last year. This resulted in an increase of inventory by 12%, and consequently, a longer market time. Time on the market increased by 31% for houses and 20% for condos. In this market, one would expect prices to fall but the median sales prices actually increased both for houses and condos. This is a good sign for sellers as they don't seem to be affected by seasonal fluctuations.
Similar to the Near North Side, the number of active listings increased by 19% over the same period last year and closed sales decreased by 30.5%. This resulted in an increase of inventory by 15%. In September, there were 154 houses and 420 condominium units on the market. Time on market was nearly unchanged and prices increased by 3.3% for houses and by 2.1 % for condos.
In this neighborhood, which is just North of Lincoln Park, active listings were down by 6.6% in September and closed sales were down by 20%. Inventory was practically unchanged. This resulted in a shorter market time and increased prices. The year-to-date median sales price for a house increased by 16% and for condos by 2.6%. This has been an ongoing trend for the whole year, which shows that Lake View is still undervalued and offers great opportunities for buyers.
Near West Side
Active listings in this part of the city increased by 15% in September and closed sales were stable. This resulted in a 15% increase in inventory. This is good news for buyers, even though prices in this area have been growing at 6 to 7 percent this year. The Near West Side includes the West Loop, which has experienced a shortage of homes for sale and steady price increases.
Near South Side
Similar to the Near West Side, this area has had an increase in active listings (up by 39% in September over the same period last year), and a decrease in sales (down by 25%) This resulted in and increased inventory of 10%. Most of the market here is dominated by condos and in September, there were 259 units listed. The year-to-date median sales price is unchanged from last year.
As prices continue to increase due to lack of inventory in this area, September saw a slight reversal of the trend. Listings were up by 6% and sales were down by 5%, resulting in an increase in inventory by 22%. Year-to-date market time for condos was 46 days.
In this area we saw a different pattern: Listings decreased by 13% and sales increased by 22%, resulting in a decrease in inventory by 7%. Year-to-date median prices increased by 4.4% for houses and 11% for condos. This indicates that the area is still undervalued and represents a great opportunity for buyers.
Edgewater and Andersonville
New listings increased by 7% in September, compared to the same period last year. Closed sales decreased by 13% in the same time frame. This resulted in an increased inventory, even though only by 1.2%. Year-to-date market time for houses was 86 days and for condos 63 days. The median sales price for a house in this area was $679,000 and for a condo it was $219,450.
The market in this area is dominated by condominiums. There were no houses listed or sold in September. There were 13% fewer listings and 18% fewer sales in September compared to September 2017. The inventory of condos on the market went up by 7% and market time increased by 5% to 81 days. This is a perfect buyer's market right now. Year-to-date prices are unchanged.
Posted by Andreas Holder on