I was out of the country when it was time for me to create my April Chicago Real Estate Market Update so it’s not only late but the data was pulled a day or more late, which means that it’s going to be off by a small amount.
For starters my sales numbers are going to be slightly high but, nevertheless, they show a continuation of the see saw phenomenon I’ve been talking about – one month high and the next month low. March was the strongest in 11 years but then April came in 1.6% below last year. And the Illinois Association of Realtors will report it down a bit more than 4.4% in just under 2 weeks.
You can see the history in the graph below and you might notice that April actually had the second highest sales in 10 years. However, I once again implore you to focus on the light blue moving average which smooths out all the noise. That line is showing a gradual upward drift but nothing like the gangbuster performance of every second month lately.
Chicago Home Contract Activity
The real fly in the ointment, as has often been the case, is that contract activity is weak. Notice in the graph below that April was lower than the last 2 years and the moving average line dipped down a bit. I’m estimating a 13.5% decline over last year, which would be the biggest drop in 6 years.
Pending Home Sales
To make matters worse we apparently had to draw down our already low level of pending home sales in order to make the paltry sales that we got. Granted, I pulled this number 5 days late, which should cause it to be understated a bit, but we fell to a 2.00 month supply, down from 2.31 months last year. That is such a large decline that I would not be surprised if it negatively impacts May sales.
Distressed Home Sales
The percentage of home sales that are distressed continues to plummet but it can’t go below 0 so the decreases keep getting smaller. Only 9.8% of April’s sales were distressed, which is of course the lowest percentage in 9 years.
Chicago Home Inventory
Inventory has to be the culprit behind the low level of sales since homes are selling very fast (see the next section). There just aren’t enough homes available for sale. We continue to hit new record lows with condos and townhomes down to just a 2.9 month supply from 3.3 months last year and single family homes down to 4.2 months from 4.6 months last year.
Chicago Home Sale Market Times
As I just mentioned homes are selling incredibly fast with condos and townhomes that sell doing so in just 68 days on average compared to 78 days last year. However, while single family homes are still selling fast they are slowing down a bit. In April the ones that sold took 109 days to sell, which is up from 100 days last year. This could be due to the actual glut of these homes at the upper end or, as I suggested last month, it might be a predictor of soon to be rising inventory.
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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.