Sue Fox, @Properties. Direct 773.816.1788

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A quiet May as Chicago buyers return to sidelines

filed under: Buyers, Chicago home sales, Market conditions, Tax credits posted on May 16th, 2010

OPEN, BUT MOSTLY EMPTY: Despite low interest rates and a large inventory of homes for sale in Chicago, buyers seem to have returned to the

OPEN, BUT MOSTLY EMPTY: Despite low interest rates and a large inventory of homes for sale in Chicago, buyers seem to be taking a break after a surge in spring sales fueled by the government tax credits.

No one was quite sure how the April 30 expiration of the federal home buyers’ tax credits would affect the Chicago market, but two weeks later, I’m ready to call it: Things have definitely and dramatically slowed down.

As one agent put it (anonymously) to the Yo Chicago real estate website, “Between agents, the water-cooler talk is kind of dead. Showings seem to be dwindling, which isn’t a good sign going into June and July.” This agent confided that he (or she?) hasn’t had a closing all year.

I was fortunate to have a pretty busy spring selling real estate, with plenty of buyers and sellers going under contract throughout March and April on a wide range of homes priced from $120,000 to $600,000. But in the last two weeks, I would agree that showing requests have abruptly declined. I was chatting with another realtor I know in Andersonville recently, and he mentioned that despite having 16 listings not a single person had called to see any of these properties on a recent weekend in May.

It will be at least a month until we start to see actual sales data for May, which is usually an active month for home-buying in Chicago. But some data is emerging that shows that many realtors were already disappointed by buyers in April.

According to the Credit Suisse monthly survey of real estate agents, the buyer traffic index fell from 34 in March to 26 in April, indicating traffic levels below agents’ expectations (any reading below 50 shows  traffic below expectations).

“Agents noted they expected to see a pickup in sales activity in April ahead of the April 30th tax credit expiration, but saw an underwhelming response from buyers throughout most of the month,” the Credit Suisse report said. “One agent commented, “We may have exhausted the buyer pool – not sure, but demand is not there like last year.” …One agent saw a delayed response to the tax credit expiration, commenting that, “Demand for the tax credit deadline kicked in LATE April.”

Home buyers who are now out and about seem to be kicking the tires rather than actively hunting for a property to buy. One couple I took out this weekend said that if they couldn’t find a house they liked at a price they could afford, they may wait a year or two to buy.

When the sales numbers for May arrive, I suspect we may find that hundreds of other potential buyers in Chicago feel the same way.

Written by Sue Fox //

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