Chicago Real Estate Market Update: Home Sales Soar To 8 Year High

For a little more than a year the Chicago real estate market has been weak – weak in terms of home sales that is. Then February showed a little sign of improvement with its 6.4% improvement over the previous year. Well, I just looked at March and it blew February out of the water with the strongest year over year gain since December 2013. In fact, Chicago’s home sales for March hit an 8 year high – and that’s despite a significant reduction in distressed property sales. That means that sales were even higher than in 2008.
In 2 weeks the Illinois Association of Realtors will report an 12.3% increase in home sales over the previous year for Chicago. In reality the number is 15.7%. See the graph below for what Chicago’s long term home sale history looks like, with each March flagged in red.
Chicago monthly home sales

Chicago Home Contract Activity

It’s a little disappointing though that contract activity wasn’t up all that much in March – only 6.3% over last March. That’s in line with the gains of recent months but as you can see in the graph below contract activity has been rather flat lately. And the gain is not of the same magnitude as the sales gains reported above.
Chicago home sale contract activity

Pending Home Sales

So how did we end up with a 15.7% gain in home sales when contract activity wasn’t that strong? It came out of pending home sales – homes that had previously gone under contract and then closed in March. You can see the effect of that in the graph below as the months of supply of pending home sales declined in March – as it usually does at this time of year. We are now at a 2.4 month supply of homes under contract.
Chicago pending home sales

Distressed Home Sales

The percentage of Chicago home sales that were distressed is still on the decline with this March at the lowest level of the last 6 years – 21.9% vs. last year’s 28.8%. You will also note from the graph below that that is slightly less than half the level from 2011.
The lower level of distressed home sales has actually been a drag on overall Chicago home sales up until recently.
Chicago Distressed Home Sales

Chicago Home Inventory

Home inventory levels in Chicago remain at exceptionally low levels. Look carefully at the graph below and you will see that detached single family homes hit a new record low of only a 4.0 month supply while condos and townhomes stayed relatively flat at a 3.6 month supply. OK. I don’t really expect you to be able to see those numbers but I’m talking about you seeing the trend. Anyway, the inventory level of condos and townhomes was still down slightly from last year’s 3.7 month supply.
Chicago months supply home inventory

Chicago Home Sale Market Times

Market times remain relatively low but there was a slight increase over last year for condos and townhomes despite the slightly lower inventory levels – 101 days, up from 90 days. Detached single family homes on the other hand experienced faster market times, which is more consistent with the much lower inventory levels this year. Detached homes that sold did so in 108 days on average, down from last year’s 114 days.
Chicago home sale market times
Given the inventory levels and market times it’s a lot easier to sell a home today than it is to buy one. I consider us lucky right now to actually have more sellers than buyers.
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