The Illinois Association of Realtors is scheduled to release their October real estate market report for Chicago and the rest of Illinois in two weeks and this will most likely be the first time in 9 months that they will report a decline in sales – down 0.8% from last year. In reality the number is more like up 1.3%, which is still not that great.
The graph below shows the last 19 years of monthly sales history with all the Octobers flagged in red and a blue moving average line drawn in. You can tell that there has been a recent uptick in sales. However, October was a bit of a disappointment since it had only the third highest sales level in the last 9 years – and that was on the heels of the highest September in 9 years.
Chicago Home Contract Activity
We’ve known that lower closings were imminent though, given the lower level of home purchase contract activity recently – running in the low single digit percentages of growth. And if you look at the graph below you can see how the blue moving average line has recently turned down. I’m currently estimating that October will end up down 2.8% from last year. It’s looking like a slow fall so far.
Pending Home Sales
Pending home sales for Chicago were basically flat to last year, though there is a longer term downward trend going on. That might be coming to an end.
October ended with a 1.86 month supply of pending sales vs. last year’s 1.84 month supply so we’ve been basically closing deals as fast as we’ve been signing them.
Distressed Home Sales
We continue to see a decline in the percentage of sales that are distressed but that decline is definitely slowing down. October came in at 18.3% vs. last year’s 20.9%. We are doing so much better than at the peak of the meltdown. However, later this week I’m going to demonstrate how not all Chicago neighborhoods have benefited equally from the recovery. No surprise.
Chicago Home Inventory
Just when you thought Chicago home inventory couldn’t get any lower it does – incredibly so. It’s hard to tell from the graph below but the numbers just keep plunging. Condos and townhomes declined from a stupid low level of a 4.6 month supply to a ridiculously low level of 3.5 months. Similarly, single family homes went from a 6 month supply to a 4.6 month supply. Yet, we’re not seeing the kinds of price increases that you would expect to accompany this tight supply. Go figure. On the other hand this totally explains the decline in sales – you can’t sell what you don’t have.
Chicago Home Sale Market Times
Along with some healthy price increases you would expect the market times to be shrinking with such a tight supply, but not so much. Condos and townhomes only dropped by one day in the last year – from 76 to 75 days. And single family homes only dropped 2 days – from 95 to 93 days. Not the least bit impressive.
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. Please be sure to verify your email address when you receive the verification notice.