Chicago Real Estate Market Update: Incredible Strength Continues In March

I’m still trying to get used to the idea of a hot Chicago real estate market because what we are experiencing right now is nothing short of incredible. I just updated my March statistics on the housing market and all signs continue to point way up. March home sales were up 16.4% over last year, which is on top of last year’s 12.1% increase and the 21st month in a row of year over year increases in home sales.
As I point out every month, when the Illinois Association of Realtors reports their home sales statistics in 2 weeks they are going to report a number close to 13.7% because they will be comparing the preliminary March 2013 numbers to the final numbers for March 2012.

March Chicago Home Sales

The long term graph of Chicago home sales below goes back to January 1997 and has all the March values flagged for comparison. This March we hit the highest sales rate in 5 years, bringing us back to 2001/ 2002 levels. You will also note that the moving average, plotted in lighter blue, is also approaching the high water mark for the last 5 years.
Chicago monthly home sales

Chicago Home Contract Activity

Home contract activity continues to hit new record levels. Just look at the graph below. I’ve only been tracking this metric for 5 years and this is the highest it’s been during that period. Also note that the moving average is hitting a new high as well. Contract activity was up about 12.6% over last year in March.
In general contract activity has been growing faster than closings, which is a bit of a mystery but a large part of that discrepancy has been reflected in a growing backlog of pending home sales. At the end of March that number hit 6435 homes, which is a 3.4 months supply at March’s closing rate.
Chicago home sale contract activity

Distressed Property Sales

Even the sale of distressed properties – short sales and foreclosures – is showing dramatic improvement, with the percentage returning to the levels of 3 and 4 years ago. In march “only” 40% of the sales were either foreclosures or short sales.
Chicago Distressed Home Sales

Chicago Home Inventory

Well, the inventory picture remains great for sellers and bleak for buyers, with properties going under contract in record time with multiple offers. In March, inventory continued to plummet to new lows so buyers still have very little to choose from. Condos and townhomes dropped to a 3.2 month supply, which is down from a high of 18.3 months almost 4 years ago. Meanwhile, single family homes dropped to a 4.2 month supply, which is down from the bubble peak of 14.1 months just over 4 years ago.
BTW, it is so easy for realtors to sell homes now that it is a crime that sellers are still paying full commission for a few hours work. Do the math people! What’s your realtor making per hour? On a $1.5 MM property that sells in 2 weeks (not unusual) the listing agent can be making more than $2500/ hour.
Chicago months supply home inventory
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