How is the real estate market doing in Chicago, IL?
The only way you can actually know how the Chicago real estate market is doing is to be informed. On this page, we will provide you with the information you need to understand how the Chicago, IL real estate market is doing. Whether you are a homewoner in Chicago or a buyer searching homes for sale in Chicago, IL, the following information is provided to give you an overview of the Chicago real estate market. The following statistics include only single family homes in Chicago. The statistics do not include condos, townhomes, or multi-unit properties. For exact figures on what your home can sell for or for questions about purchasing real estate in Chicago contact Bowers Realty Group at (630) 712-1921 today.
What happened to the homes that were listed for sale during May 2022?
The above statistics were compiled based on all detached single family homes listed for sale in Chicago, Illinois between June 2021 and May 2022.
Of the 5,331 homes that were on the market in Chicago during May 2022 81.6% never sold. 61.8% are still listed for sale and 19.8% were taken off the market by the home seller for one reason or another. Of all the homes that were for sale at some point during May 2022, only 18.4% were sold! This is not an anomaly. The percentage of homes that actually sell in any given month is small when compared to the total number of homes on the market. The key to being part of the "sold group" is to hire a Realtor that understands how to price your home correctly based on its location and condition.
Are there fewer Short Sales and Foreclosures in Chicago?
During May 2022 the real estate market in Chicago consisted of 96% Traditional homes sales. That is an increase over April 2022 of 0.3% and a decrease over May 2021 of 0.9%. Increases in the percentage of Traditional home sales are good sign for the market. Higher percentages of Traditional home sales allow the home prices in the market to rise, whereas, higher percentages of Short Sales and Foreclosures drag the market prices down. The more foreclosures and short sales that are on the market, the lower the overall market prices will be, even for traditional homes.
Are home values in Chicago, IL going up or down and by how much?
On average, sold home prices in Chicago, IL have depreciated (fallen) -4.99% when comparing May 2022 to May 2021 (year over year). On average, sold home prices in Chicago, IL have depreciated (fallen) -6.06% when comparing May 2022 to April 2022 (month over month). You can see the trend of where prices have come from and where they appear to be headed in the Median List Prices and Sold Prices chart below.
Median List Prices and Sold Prices for Chicago, IL
While interesting and often reported throughout the industry, Month over Month (MoM) pricing statistics can be misleading about where real estate prices are trending. Fluctuations due to seasonal demand in the housing market can show price decreases MoM even while home prices continue to trend higher in the area. To really understand how prices in Chicago are trending, you must look at the median prices for an extended period of time. In the chart above you can see the trend of where prices have come from and where they appear to be headed over the last 13 months without weighing a single MoM increase or decrease in prices too heavily.
How quickly are homes selling in Chicago, IL?
People always want to know how quickly homes are selling in Chicago. The above chart shows the average number of days homes were on the market before they sold in each of the last 13 months. While this is an interesting number, it varies drastically when comparing homes that had to lower their price versus homes that sold at their original list price. How quickly a home sells is based almost entirely on its price! That is not to say homes should be priced low to sell, they definitely should not in most cases. That costs the homeowner money and can bring down property values for the entire neighborhood. Homes should be priced at the highest level the market will bear for the homes location (which you cannot change) and its condition (which you can change). Homes priced correctly from the start sell much faster than homes that are overpriced to start.
Homes Listed and Homes Sold in Chicago, IL
The one thing that stands out in the chart above is that a very small percentage of homes on the market are actually sold each month. Why is that important? For home sellers, it is important because there is a lot of competition when selling your home. If you want to sell your home and not just have it listed, you have to have your home priced correctly for its location and condition compared to the many homes competing against you. For buyers it is important because it reminds you that you can afford to be selective. With such a large proportion of homes that go unsold each month, you do not have to overpay for a home that meets all your needs and wants!
Is it a Buyers' Market or a Sellers' Market in Chicago, IL?
In order to determine if it is a Buyers' Market or a Sellers' Market we need to look at the absorption rate in Chicago, IL. The absorption rate is calculated by determining how long the current inventory of homes on the market would take to sell based on the previous month's buying rate (how many homes were sold last month). On June 01, 2022 there were 3295 current listings on the market in Chicago. There were 980 homes sold in Chicago during May 2022. That means as of June 01, 2022 there is an inventory of 3.36 months. That indicates that it is currently a Neutral or Balanced Market.
So it is currently a Neutral or Balanced Market, but where is the market headed? In order to determine where the market is headed, we need to compare the number of newly listed homes last month to the number of sold homes last month. That will show us if inventory was increasing or decreasing last month. As stated above, there were 980 homes sold last month. There were 1780 new listings last month. That means that the inventory is increasing, which is a strong indicator that the market is heading toward a Buyers' Market.
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