You’ve been looking for a Chicago condo for months now and it seems like you just can’t find anything decent. All the condos in Chicago seem to be either overpriced or in pretty terrible shape. Well, there’s a very real reason why your condo search seems to be going nowhere.
As I’ve pointed out before Chicago’s home inventory is running very low as a result of stubborn or broke sellers refusing to sell at current market prices. In particular we track the inventory (months of supply) of 2 – 3 bedroom condos in Chicago and it has been trending down for over a year now as you can see in the graph below. In December inventory levels hit a new low for that time of year – the lowest level in 6 years. That’s good news for sellers and bad news for buyers.
With so little inventory on the market it’s no wonder you can’t find what you are looking for. And don’t forget that 45% of all Chicago home sales are distressed properties so a lot of what is out there is pretty beat up.
If you are interested we maintain a page of on our Web site that contains this condo inventory data along with numerous other Chicago real estate market data all in one place.
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Interesting. I don’t know if it’s so much that sellers aren’t selling their condos because they’re “stubborn.” Quite a few simply can’t afford the loss. We have a 3 br condo, in good shape, that we’d love to sell but we literally can’t afford the $60-70K loss. And I know we’re not alone.
You are absolutely correct. I was trying to come up with one word that captured both unwillingness to sell and inability to sell and “stubborn” doesn’t quite work. I’ll try to rephrase.
There are also 2 forms of “can’t afford to take a loss”: 1) Can’t come up with money to close (logical) and 2) Can’t stand the idea of recognizing a loss on something that has already lost value (illogical).
Gary, any reason you only track 2-3 bedroom condos? I’d love to see similar graphs for 1, 1.5 units.
I only track 2 – 3 bedrooms because that’s the sweetspot of the condo market in Chicago. It’s certainly possible to do all kinds of other analyses but there’s only so many hours in the day. Need to take care of clients first 🙂
Come to think of it I recently looked at that for a client and was surprised to discover that there was even less one bedroom inventory available.
With inventories low, we ought to see an uptick in prices, and then higher sales volumes. Thinks are looking up and the economy is gaining steam.
I don’t think it will reflect as an increase in prices. I do think you will get price support but as soon as prices start to show signs of rising all these sellers are going to come out of the woodwork and keep prices low.