May Home Sales Rise 34% In Chicago Area

A few minutes ago The Illinois Association of Realtors announced that May home sales rose 33.6% in the Chicago area. The chart below shows the historic sales data going back to January 2006 along with a 12 month moving average line that smooths out the seasonal fluctuations. In addition, we have flagged each May for easy comparisons.
Chicago area home sales

This continues an 11 month string of rising sales and the IAR press release goes on to provide a forecast of home sales over the next few months:

The forecasts for the next three months (June, July and August) suggest
a continuation of the positive changes for sales–in the 16 to 25
percent range in Illinois and in the 19 to 29 percent range in the
Chicagoland region.

However, I don’t buy this. These reported numbers are closings, which were largely the result of contracts entered into during the preceding 2 months and were driven by the tax credit that expired at the end of April. Ever since that expiration contract activity has been down by 15 – 25%. June may be another good month – maybe not – but by the time we get to July the party is going to be over.

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