With the original home buyer tax credit scheduled to expire at the end of November I fully expected December to really be a slow month in Chicago. My assumption was that a significant amount of housing demand had been pulled forward, not leaving much for subsequent months.
However, when I recently checked new real estate contract activity for December I was blown away by how strong it was.
Contracts in December for Single Family Homes and Condos/Townhouses in Chicago were up 95% and 105% respectively over 2008.
Of course, I was curious as to whether or not certain price ranges had disproportionately been affected so I looked at the price distribution of these contracts.
As you might expect, the 2009 contracts for single family homes were skewed more towards the sub-$200K price range than in 2008 but, nevertheless, some activity above $200K was still stronger than in 2008. However, the big surprise was the amount of activity below $100K – both in 2008 and 2009. The 47% numbers reported above are not an error. I had never looked at that price range before and was shocked at how many single family homes sell in this price range – some as low as $10K. Of course, these are really scary looking properties and I’m not even sure they are habitable.
The story for condos/townhomes is pretty much the same.
In 2009 condo contracts also skewed more towards the sub-$200K range but again activity above $200K was still substantially higher than in 2008.
This is further evidence that the market in Chicago is coming back strong. Granted, the tax credit has been extended, but I would have expected that to have already run its course by the end of November.