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
And we can pretty much count on strong closings for at least the next couple of months since contract activity remains at record levels. I’ve only got 13 years of data in the graph below but May set a record for that time period and was 18.7% higher than May 2019. That also makes 12 months in a row with an increase in contract activity from the previous year.
Chicago home sale contract activity blew past all previous years, hitting another record high for this time of year after plummeting to record lows when the pandemic first hit.
Pending Home Sales
Pending home sales (under contract, waiting to close) are also going to contribute to higher closings over the next couple of months. They are at the highest level in 5 years and 857 units above the 2019 level. That’s a lot when you consider that June will have somewhere in the neighborhood of 3000 closings.
After hitting historic lows the backlog of homes likely to close in the next 1 – 2 months has reached the highest levels in 5 years.
Distressed Home Sales
The foreclosure moratorium is still keeping a lid on distressed sales as you can see in the graph below. May set a new record low of only 1.1% distressed sales, down from 5.3% last year.
Since the housing crisis the percentage of home sales that are distressed has steadily declined to almost negligible levels.
Chicago Home Inventory
The low number of homes on the market is exposing the flaws in the standard measure of months of supply of inventory so I continue to calculate the number myself, based upon homes for sale and same month contract activity. The result is graphed below and you can see that detached inventory is at a record low (1.4 months of supply) and attached inventory is at the lower end of the range for May (2.6 months of supply). So inventory remains tight for both types of properties but especially for detached homes.
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
The time it takes to sell a home in Chicago is at a record low for detached homes – down from 79 days on average in 2019 to just 50 days in May. But half these homes are selling in 10 days or less now, down from 30 days in 2019. On the other hand attached homes (condos/ townhomes) are taking longer to sell now – on average 81 days vs. 70 days in 2019. But half the attached homes are selling in 24 days or less, the same as in 2019.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.
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