Posting my Chicago real estate market update on the 8th of the month last month seemed to do the trick. My numbers were spot on with the Illinois Association of Realtors’ number that came out 2 weeks later so let’s try this again.
Home sales for the month of May were significantly higher than last year’s numbers – up 13.0%. However, because of an inconsistency in their process the IAR will report it as a 10.1% gain in about 2 weeks. That is actually the second strongest gain since December 2013 and it leaves the sales number at the second highest level in 8 years. 2013 was a bit higher.
You can see the long term history in the graph below with a blue moving average line and all the May numbers flagged in red.
Chicago Home Contract Activity
Contract activity did not seem all that strong in May, though the first 4 months of the year turned in a pretty good performance. There’s also the possibility that I’ve over-estimated the contract terminations that will occur. I’m estimating that contracts were down 1.5% from last year, which may not bode well for future closings.
The graph below contains a blue moving average line and the red markers correspond to all the May numbers for easy comparisons. You can see how the last 3 years have been fairly flat.
Pending Home Sales
When home sales (closings) are strong despite no increase in contract activity it can only happen through a reduction of pending home sales and that’s been happening to some extent. On a month’s of supply basis pending home sales have been drifting somewhat lower, which means it will be harder for them to sustain high closing rates without more contracts being written. At the end of May there was only a 2.1 month supply of pending home sales, compared to 2.25 months last year.
Distressed Home Sales
The share of home sales that are distressed just continues to plummet, hitting a new 7 year low for May of 16.2%. This plunge has really thrown a damper on overall home sales. For example, the sale of non-distressed properties was actually up 20.6%.
Chicago Home Inventory
The home inventory situation in Chicago is totally remarkable. It keeps sinking to new lows, making for an extremely difficult buying environment. But it’s great for sellers. Detached single family homes fell to a 4.3 month supply from last year’s 5.3 months supply and condos/ townhomes fell to 3.8 months from last year’s 4.3 month supply.
Chicago Home Sale Market Times
You would expect that with the extremely low inventory levels homes would be selling at lightening speed. They are selling fast but really not that much different from last year. Detached homes that sell are selling within 91 days, unchanged from last year. Attached single family homes are selling in 75 days, up slightly from 72 days last May.
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