Sue Fox, @Properties. Direct 773.816.1788
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It’s an odd conundrum: Mortgage rates have never been lower and home prices have plunged, making 2012 an excellent time to buy property… And yet, there are so few places to choose from. Where have all the houses gone?
In Chicago, housing inventory is so low that many would-be buyers have grown frustrated with their search and decided to wait until the spring. As of October 1, there were 37,619 condos and single-family houses for sale, a 17% decrease over a year ago. In fact, Chicago’s home inventory has been steadily falling for years.
Here are the October figures for the last few years, according to data kept by the ITT Technical Institute:
October 2011 45,162 homes for sale
October 2010 51,265 homes for sale
October 2009 53,949 homes for sale
October 2008 60,169 homes for sale
October 2007 67,479 homes for sale
The limited selection has meant long and aggravating searches for buyers eager to find a home. Making matters worse (at least for ordinary buyers who want to live in the home without doing major renovations) many of the houses and condos on the market are distressed properties that need work. When a well-kept home in a desirable neighborhood does hit the market, it often sells quickly and sometimes attracts multiple offers.
This summer, I helped one couple find a 4-bedroom house in Edgewater, in a good school district they had targeted for their children. But the search took six months, and they made offers on at least two or three other homes that went to other buyers. They were very motivated to buy, but the problem was there were hardly any houses to choose from! Another couple I worked with, who were seeking a 3-bedroom condo in Andersonville, Edgewater or Uptown, ran into the same problem and finally decided to keep renting until the spring, when more properties hit the market.
I can think of at least three reasons for the tight inventory: Many Chicago homeowners are still underwater and can’t afford to sell, banks who own foreclosed homes have been holding some of their inventory off the market so as not to further depress prices, and thousands of would-be sellers simply don’t want to list their homes now — at the bottom of the market — when prices look like they will be higher next year or the year after.
Serious Chicago buyers know that they need to be ready to pounce when they see the home they want, before it’s gone. And for sellers, the lack of quality inventory gives them a chance to finally sell their homes, especially if they are in good condition and priced competitively.
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