Chicago Real Estate Market Sets A 16 Year Record

After last November surpassed the Chicago real estate market’s 2019 home sales number by 18.4% it was hard to believe that this year could be any better. Nevertheless, more than 1 1/2 years into the pandemic, we just posted another gangbuster sales increase of almost the same amount – 19.0%. Of course in two weeks the Illinois Association of Realtors will publish a smaller increase of only 15.9%.
Anyway, November 2021 sales were 39.8% above November 2019, which is totally amazing. Look carefully at the graph below (all Novembers flagged in red) and you’ll see that this is a 16 year sales record. Whereas last year the sales increase was mostly due to higher detached home sales this year’s increase is almost entirely due to higher condo/ townhome sales.

Chicago monthly home sales
Chicago home sales had been declining now for several years but the Coronavirus really tanked the market in May and June of 2020. The market returned to more normal levels starting in July and is now setting new records.

Chicago Home Contract Activity

The number of home purchase contracts also hit a record in November – a 14 year record, which is all the years that I have data for. Contract activity was up 13.1% over last year and 23.1% over 2019 levels, suggesting that we should continue to see sales records broken for at least another month or two.

Chicago home sale contract activity
Chicago home sale contract activity is still setting records

Pending Home Sales

The number of homes under contract and waiting to close did decline slightly from last year, losing 178 units but that’s still higher than 2 of the previous 3 years. This pipeline of contracts feeds future closings and the decline contributed to the increased closings in November, but only slightly.

Chicago pending home sales
After hitting historic lows the backlog of homes likely to close in the next 1 – 2 months rebounded during the pandemic but is now starting to retreat again

Distressed Home Sales

If you look at the graph below of the percentage of home sales that are distressed you’ll see that we’ve been skating along the bottom for a few months now. November set another record low of only 1.4%, down from 3.2% last year. The pandemic foreclosure moratorium has certainly been depressing this number and now that it’s lifted it will be interesting to see how high it rises.

Chicago Distressed Home Sales
Since the housing crisis the percentage of home sales that are distressed has steadily declined to almost negligible levels.

Chicago Home Inventory

Well, it’s amazing that we’ve had such high sales levels when inventory has been so depressed. Once again we set record lows for both attached and detached homes with only a 2.2 month supply of detached homes, down from 3.0 months last year. Attached home inventory really plummeted from a 7.4 month supply last year to only a 3.9 month supply this year. When the pandemic first hit condos really fell out of favor but they have made a huge resurgence since then as evidenced by my earlier discussion of what’s driving the sale numbers

Chicago home inventory
After a big Coronavirus induced spike in April 2020 the inventory of homes for sale dropped back down. Both detached and attached inventory keep setting new record lows.

Chicago Home Sale Market Times

However, there has been a bit of a running mystery in the data. While detached homes have logically been selling much faster attached homes have actually been taking longer to sell. Detached homes that closed in November went under contract on average in only 46 days, down from 64 days last year and that makes sense since there are fewer homes on the market relative to sales. However, despite the decline in attached inventory it’s actually taking longer for those homes to sell – 80 days this year, up from 66 days last year. Go figure.
And by the way…half the homes are selling in roughly half the average time!

How long it takes to sell a home in Chicago
When the pandemic first hit Chicago market times rose but they finally recovered with detached homes at a record low.

#RealEstate #ChicagoRealEstate #Coronavirus
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry 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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