We have this ongoing debate on Cribchatter about whether or not the Chicago real estate market is dead. According to Sabrina in a recent post “(September appears to be the WORST month in 2013 to have listed. Lots of properties listed in September are just sitting there.) The Chicago market has really slowed.” and later on that same page “It’s dead as a doornail out there.”
So I decided to take a look at Chicago homes listed in the first two weeks of September to see just how fast they were selling compared to homes listed in the same time period last year. In the graph below I analyzed the cumulative percentage of homes that went under contract as a function of time on the market.
As you can see there is still the initial flurry of activity that existed last year but as time progresses it is taking longer and longer for the same percentage of listings to sell. Hitting the 20% mark took 5 days longer this year, 30% 14 days longer, and 40% 24 days longer. We don’t know yet how long it will take for us to hit the 50% mark this year because not enough time has passed yet.
There is another way to look at this data though – compare the percentages at the same point in time. And at the end of the comparable period – December 19 – 43.7% of the 2014 listings were sold, compared to 49.9% sold during 2013. And it turns out that that 6.2% difference can be more than fully explained by something else that is going on this year: a higher percentage of listings are being pulled or are expiring – mostly being pulled. Through December 19 more than 36% of the 2014 listings were dead, compared to 28.3% of the listings at that same point in time last year. As I just said, that 7.7% difference is more than sufficient to explain the gap between last year’s sale rate/ level and this year’s sales rate/ level.
The fact that a higher percentage of listings are being pulled within 3 months of being listed (a relatively short time) doesn’t indicate to me that the market is necessarily worse than last year. I think what really has been happening is that a lot of would-be sellers heard about the higher real estate prices in Chicago and decided to test the market at high prices. But then they quickly got discouraged when their delusions of grandeur didn’t materialize.
So is the Chicago real estate market really dead? Was September a terrible month to list in? It doesn’t look like you can really make that claim.
#realestate #chicagorealestate
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