Well, the good news is that Chicago home sales were up 3.3% in October from last year – and that’s the strongest growth in 7 months. But the bad news is that 3.3% growth is the strongest growth in 7 months. In fact, if you look at the graph below you get a pretty clear picture that the Chicago real estate market has stalled. October sales were lower than all 3 years from 2013 – 2015 and that light blue moving average line is barely advancing these days.
The IAR will be reporting their version of home sales in two weeks and they will show sales flat to last year. Their numbers always come in slightly lower than mine.
Chicago Home Contract Activity
When you look at contract activity you get much the same picture and, since contract activity precedes sales by 1 – 2 months, that means these sales trends are not likely to change in the next month or two. Last month’s contract activity really isn’t that much different than the previous 5 years and, again, the moving average line is barely budging. I’m currently estimating that October contracts were up by a paltry 0.1% over last year.
Pending Home Sales
When I look at pending home sales it appears that we continue to obtain a portion of our sales each month from drawing down the backlog of homes that have been under contract – or I guess it’s possible that contracts close faster these days. Pending home sales in October dropped from a 2.12 month supply last year to a 1.89 month supply this year.
Distressed Home Sales
The portion of home sales that are distressed continues to decline and hit record lows since I’ve been tracking the data. In October only 8.8% of home sales were distressed compared to 13.0% last year. With current mortgage default rates below 1% I guess this number can get into that range eventually – once we clear the backlog. But remember that Illinois has one of the longest foreclosure timelines in the country so it might take a bit longer to get there.
Chicago Home Inventory
It’s really all about the inventory of homes for sale. There just isn’t enough and each month I report on how it keeps going lower and lower. And this is what is logically believed to be the cause of low home sales.
The inventory of condos and townhomes (attached) for sale is down to a measly 2.9 month supply compared to 3.2 months last year and the inventory of houses (detached) is down to 4.1 months from 4.9 months. Both of these numbers are well below the 5 month number which is believed to indicate a seller’s market.
Chicago Home Sale Market Times
When inventory is this low homes sell really fast and that’s exactly what’s happening. Market times continue to drift down. Condos and townhomes that closed in October went under contract on average in a record 60 days, down from 68 days last year. Houses sold in 81 days (it always takes longer than condos) compared to 87 days last year. Market times have not always been consistent with the inventory picture but this month they are.
I also maintain a permanent page with additional Chicago real estate data such as employment statistics, foreclosure activity, and home prices.
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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.