As I’ve been pointing out for some time now home contract activity has been really high in the city of Chicago – much higher than actual closings on a year over year basis. So at some point those contracts had to either fall apart or close. Well, it looks like a bunch of them just closed in October. As the Illinois Association of Realtors will report in a week and a half October sales were up 53.7% from last year. That’s huge. In fact, we haven’t seen an increase of this magnitude for 3 years and back then it was juiced by the anticipated expiration of that stupid homebuyer tax credit. October also marks the 16th straight month of year over year home sales increases.
October Home Sales In Chicago
The graph below shows monthly home sales going back to 1997, with all the Octobers flagged in red for easy comparison and a light blue line representing a 12 month moving average that smooths out the effects of seasonality. As you can see, last month was almost the highest level in 6 years but even that puts us back to 1999 levels of sales.
Home Contract Activity
Chicago continues to have exceptionally strong contract activity, which is a good indicator of continued high levels of year over year closing increases. October once again showed the highest level in the last 5 years, up almost 39% from last year.
That leaves 5381 contracts pending or right around 2.7 months worth of closings, which seems like a lot (I really don’t know because I only recently started tracking this) and should fuel many more months of strong year over year comp closings.
As anyone who is looking to buy something right now can tell you there just isn’t that much to pick from. The chart below, from the Chicago Association of Realtors clearly shows the lowest level in the past 5 years, which should be great for prices. It shows 6.1 months worth of single family homes and 4.8 months of condos. That’s for the month of September. We will actually be updating our own inventory metrics for 2 – 3 bedroom condos in the next couple of days and it will be through October.
Distressed Property Sales
Short sales and foreclosures at 39.1% of total sales appear to be fairly typical for this time of the year. We’re not seeing any evidence of the greatly feared shadow inventory being dumped on the market and driving down prices.