Chicago Real Estate Market: Just How Fast Have Homes Been Selling?

There has been a lot of discussion over the past few months about just how fast homes have been selling in the current Chicago real estate market. People have even gone so far as to say that if your home hasn’t sold in the first 2 weeks that you’re on the market you must be overpriced. Can that really be true? That seems like an awfully convenient realtor story used to get clients to list low so that the realtor makes a quick buck.
If we look at the average market times of homes that have recently closed it has been running around 66 days for both June and July, which is a 9 year record low. Of course, averages rarely tell the whole story. So I decided to look at the ultimate outcomes over time for a group of homes listed in the last 2 weeks of March. I had to go back that far in order to have enough time to see what happened to most of these homes.
I looked at a total of 1621 listings, which excluded any homes which had been previously listed under a different MLS ID – a game that realtors play to get renewed attention on a listing. This could bias the results of my analysis as these types of listings tend to be on the market longer. However, there is no way to tie multiple listings of a home together in the MLS.
I broke down the outcomes into 3 groups:

  • The listing expired or was cancelled. Unfortunately, some of these cancelled listings probably quickly came back as a new listing but I have no way to tie those together. Consequently, these listings simply show up as cancelled.
  • The home was sold.  Either it closed or it’s still under contract. If a listing went under contract but subsequently the contract fell apart it’s as if the home never sold in the first place.
  • The home is still for sale.

The graph below shows the change in outcomes over time (you can click on it for a larger version) and indeed a significant percentage of the homes listed back in late March sold very quickly. In fact, almost 32% sold within 14 days of the list date. However, it’s just ridiculous to believe that 68% of listed homes are overpriced. Not to mention that more expensive homes tend to take longer to sell than less expensive homes. Overly simplistic rules of thumb are just dumb!
How fast Chicago homes sell
Fast forward to day 156 – a little over 5 months from listing – and 8.6% of the original listings are still for sale (I’d say those are probably overpriced unless they are really expensive), 63.8% are sold in one form or another, and 27.6% have been cancelled or have expired.
I did one other analysis just for the heck of it but I refuse to show the graph because I don’t want the result to be misconstrued and given improper credibility because there’s a graph floating around. As you might expect the homes that sold faster tended to sell at a higher sale to list ratio than the homes that took longer to sell. I say “as you might expect” because the lower the list price of a home the faster it’s going to sell and that’s most likely what is going on here.
However, YOU CAN NOT CONCLUDE THAT SELLING FASTER MEANS YOU SELL FOR A HIGHER PRICE! I know that many realtors equate a high sale to list ratio with a higher sales price but that’s just pure nonsense. You can NOT prove that the two are the same thing. In fact, it’s more likely that a higher sale to list ratio simply results from a lower list price.
#RealEstate #ChicagoRealEstate
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service discount real estate brokerage. If you want to keep up to date on the Chicago real estate market, get an insider’s view of the seamy underbelly of the real estate industry, or you just think he’s the next Kurt Vonnegut you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.

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