Chicago Real Estate Market Update: Home Sales Still Going Strong

First I’ll give you the official Chicago home sales numbers for October, which will be released in about 2 weeks, but it’s going to send you in the wrong direction. You see…home sales were down 4.9% from last year, although the Illinois Association of Realtors will tell you they were actually down 5.9%. Don’t be fooled. They are wrong and I’m right.
However, because of the pandemic, 2020 was quite an anomaly so it’s kinda pointless to compare this year to last year. Then again, the world we live in now has remained a bit anomalous as evidenced by the fact that those sales numbers were actually exceptionally strong on a historical basis. My usual graph below has Chicago’s monthly home sales going back to 1997 with all the October values flagged in red. Notice how this October was actually higher than all the other years going back 15 years! In particular, October sales were up 18.0% from 2019.
It’s still mostly condo (attached) sales driving the growth – up 24.0% from 2019 – while detached sales put in a respectable performance with 6.1% growth.

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

It’s a pretty good bet that we will continue to see strong sales for at least the next month or two as contract activity just hit a new high. In the graph below we have a 4.9% increase from last year and a 23.7% increase from 2019.

Chicago home sale contract activity
Chicago home sale contract activity is still showing tremendous strength relative to historic levels.

Pending Home Sales

On the other hand pending home sales continue to fall slightly, losing 198 units from a year ago. That means that the pipeline goosed sales a bit. But do take note that pending sales are still above 2 of the last 3 years.

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

The end of the foreclosure moratorium and the associated increase in foreclosure activity has yet to impact distressed home sales. We actually saw a slight decrease in October from 2.4% of sales last year to 2.3% this year.

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

Inventory levels are still hitting new record lows according to my proprietary calculation. Detached inventory at 2.2 months supply was considerably lower than the 3.9 month supply of attached homes, which was still very low by historic standards. This is going to get interesting as we are now in the off season for selling Chicago real estate but if inventory remains low like this we could see a pretty strong market for sellers.

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

Really, one of the best ways to gauge the strength of a real estate market is to look at how quickly homes are selling. Things have gotten a bit weird though. Detached homes make perfect sense because, as you’d expect, with low inventory levels they are selling in only 47 days on average, down from 78 days in 2019. However, attached homes only went from 83 days on average in 2019 to 80 days this October. You would expect a much faster sales cycle with inventory so low but who knows.
It’s worth noting though that the median sales times are considerably lower. Half of detached homes sold in 22 days or less and half of attached homes sold in 36 days or less.

How long it takes to sell a home in Chicago
When the pandemic first hit Chicago market times rose but now they are actually quite a bit lower than last year. Detached homes are 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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