Chicago home sales have been declining now for several years but the Coronavirus really tanked the market in May and June of 2020. The market returned to more normal levels starting in July and is now setting new records.
Chicago Home Contract Activity
Contract activity also remained strong as you can see in the graph below, approaching a record high. The record was actually set last year after the initial shock of the pandemic wore off and the Chicago real estate market caught fire. It looks like last month was off all of 1.3% from last year. But the moving average line tells us that the last 12 months by far have had the strongest contract activity since I’ve been tracking it.
Chicago home sale contract activity came close to another record high for this time of year after plummeting to record lows when the pandemic first hit.
Pending Home Sales
The homes that have gone under contract but have not yet closed end up in the pending home sales bucket. Eventually they will end up as closed sales so an increase in this number gives us plenty of good reasons to be optimistic about future sales. Last month was higher than the previous year (which was not negatively impacted by the pandemic) by 325 units.
After hitting historic lows the backlog of homes likely to close in the next 1 – 2 months has reached the highest level in 4 years.
Distressed Home Sales
As has been the case for some time – especially with the pandemic induced moratorium on foreclosures – the percentage of home sales that are distressed has dropped to miniscule levels. June came in a little higher than May at 1.6% but that’s quite a bit lower than last year’s 4.2%.
Since the housing crisis the percentage of home sales that are distressed has steadily declined to almost negligible levels.
Chicago Home Inventory
The inventory of homes available for sale in Chicago remains a constraint on the real estate market. I’m still using my own calculation because I think the standard reported metrics have issues and you can see just how crazy low it has been in the graph below. Detached home inventory was at a mere 1.7 month supply – near the lowest levels recorded and June is not typically the low point of the year. Attached inventory was a bit higher at 2.9 months but that’s still exceptionally low for condos in June.
After a big Coronavirus induced spike in April 2020 the inventory of homes for sale dropped back down. Detached inventory keeps setting new record lows while attached inventory has dropped to the lower end of the historic range.
Chicago Home Sale Market Times
With inventory so low it’s not surprising that detached homes sold in record time on average – only 40 days in June, down from 72 days in 2019. But half the homes sold in 10 days or less. That’s insane! I do think that when the market gets that fast it feeds on itself. Buyers tend to act faster and sellers get nervous when their home doesn’t sell right away so the price cuts come quicker. Attached homes sold on average in 69 days, up slightly from 65 days in 2019, with a 21 day median.When the pandemic first hit Chicago market times rose but now they are actually quite a bit lower than last year. Detached homes are at a record low.
Leave A Comment
You must be logged in to post a comment.