Sue Fox, @Properties. Direct 773.816.1788
Subscribe to Site
- FHA loans
- Market conditions
- Tax credits
Real Estate radio
Archive for the 'Chicago home sales' Category
The monthly sales data is out for February, and the median home price in Chicago — now $177,500 — appears to be pretty much what it was a year ago. It’s actually a tad higher (by $1,000). Perhaps prices have finally stopped their relentless downward slide in the Windy City.
Yet sales volume continued to plummet, meaning that fewer properties are actually changing hands. A year ago in February, there were 1,225 single-family homes and condos sold in Chicago, according to the Illinois Association of Realtors. But in February 2011, only 1,056 homes were sold, nearly a 14% drop. This is not encouraging news for sellers who are hoping to attract buyers during this year’s spring market.
And prices are way down from where they were even in 2008, which was well after the downturn began. Take a look at Chicago’s median home prices in February over the past four years:
- February 2011: $177,500
- February 2010: $176,500
- February 2009: $218,625
- February 2008: $290,000
This simple chart shows the devastating impact of the thousands of Chicago homes that have fallen into foreclosure or are being marketed as short sales. All these distressed properties have pushed the year-over-year median price down nearly 40% in just a few years.
When will it end?
Not in 2010, apparently. The latest round of real estate data shows that Chicago home prices fell 5% to a median $199,250 in December 2010, compared to the same month a year earlier, according to the Illinois Assn. of Realtors. And substantially fewer homes changed hands: Chicago home sales (single family and condominiums) totaled 1,444 sales in December, an 18% decline from the 1,767 homes sold in December 2009.
The housing numbers look different, however, if you survey the entire year’s activity. For the year, Chicago home sales dropped only slightly; they fell 1.6% with 19,089 sales in 2010, compared to 19,398 sales for 2009. This stability was undoubtedly due to the giant pillar propping up the housing market all spring — the federal tax credits for home buyers. Once that artificial support was removed, both sales and prices plunged. For the year, Chicago’s median sales price fell 8% to $207,000.
“Buyers are finding value and opportunities in the marketplace and making long-term investments in real estate due to compelling pricing and low interest rates,” said Mabel Guzman, president of the Chicago Assn. of Realtors. “The median price for the city of Chicago in 2010 was $207,000, down from $225,000 the previous year, reflecting the influence of distressed properties in communities across Chicago.”
I’m beginning to hear both buyers and sellers ask the obvious question: Are we at the bottom? We could be bumping along it, I think. Across the country, the average home prices in major cities have fallen to their lowest point in many years, according to a recent New York Times story. The latest Standard & Poor’s Case-Shiller Home Price Index show home prices in nine of 20 cities — including Chicago — have fallen to new lows for this economic cycle. The Chicago index has slipped 7.6% from November 2009, with most of that decline happening since September.
A couple days ago I met with a group of about 25 seasoned @properties realtors to discuss a weighty topic in our topsy-turvy industry: pricing. Leading the discussion was Paul Boyd, our assistant managing broker and performance coach, who emphasized that Chicago homes that aren’t selling in today’s market are, by definition, over-priced. If they were priced correctly, he pointed out, they would attract a buyer.
The realtors gathered around the conference room swapped stories about stubborn sellers who refused to lower their prices, their homes gathering dust without showings for months. We recalled others — the ones who listened to us! — who agreed to a reasonable price right off the bat and quickly found buyers. We lamented the difficulty of telling “the brutal truth” to sellers: Your property is worth much less than you had hoped.
Finally, Paul advised one of us to tell a seller (someone who was unwilling to lower her price, despite being on the market for months with no showings), “I think you should stay here.”
Because that, after all, is what it really comes down to. Do you want to move, or do you want to stay? And if the answer is move, that usually means you are going to have to lower your price. More than you wanted to. More than your neighbor did when she sold two summers ago. Maybe more than you can really afford. But enough so that buyers who are out house-hunting this spring will actually come to visit your home, realize that it is well-priced, and be confident enough to make an offer.
How much is enough? Your realtor should have a pretty good idea. Ask her or him to sit down with you and carefully explain the comps for your neighborhood and type of home, so that you can see clearly what similar properties are selling (or not selling) for. If your home is already on the market, consider how much traffic you’ve been getting and what comments prospective buyers have made.
And whatever you do, do not simply leave your house or condo on the market for months at the same price! If it’s not selling, that means it’s priced too high for the current market. And if you’re not willing to lower the price, as Paul says, maybe you should just stay put.
Got a million dollars? If the recent sales figures are any indication, more wealthy home buyers are sinking their cash into Chicago real estate, driving up sales of condos and houses priced at $1 million or more. Sales of such properties jumped 31% in 2010, according to a recent story in Crain’s Chicago Business.
Such transactions are relatively rare: There were only 480 Chicago home sales for $1 million or higher in 2009, and 630 last year. These pricey properties, which are typically found in choice neighborhoods such as Lakeview, Lincoln Park, Old Town, Gold Coast, and Streeterville, tend to move slowly, sometimes taking a year or more to attract a buyer. In a sluggish market like ours, this means the backlog of unsold luxury homes could easily amount to an 18-month supply — more than twice the inventory we’d see in a healthy market.
The downtown Chicago condo market helped drive the increase in high-end sales, according to Crain’s. Luxury condo sales soared nearly 50% , to 364 units in 2010. Closings at new high-rises — like the Gold Coast’s Elysian Hotel & Private Residences, 11 E. Walton St., and Walton on the Park, 2 W. Delaware Place — contributed to the increase.
If you’re in the market for a high-end property, now may be the ideal time to buy. The median price of Chicago’s luxury single-family houses slid 12% to about $1.3 million last year, compared to $1.5 million in 2009. The median price for high-end condos actually rose a bit, but it was skewed by sales at top-shelf projects such as the Elysian. In general, Chicago condos with million-dollar price tags can now also be found in (the swankiest corners of) the bargain bin.
Sales of Chicago single-family houses and condos fell a dramatic 38.5% in November compared to the previous year, according to the latest data from the Illinois Assn. of Realtors. Prices slipped, too. The median home price in the city of Chicago was $206,000, down 4.2% from $215,000 a year ago in November 2009.
While prices seem to be looking for a bottom, far fewer properties are changing hands than in years past. If you look three years back, to November 2007, you’ll find that 1801 sales closed that month compared to 1144 this November, a sobering 37% plunge. Prices plummeted in those three years as well, sinking from a median sale price of $290,000 to today’s $206,000 — a 29% drop.
This is why we’re now seeing so many short sales and foreclosures in Chicago. Thousands of people who bought homes in 2005, 2006, 2007, and even 2008 have seen the value of those properties drop perhaps 10 to 40%, depending on what they own in which neighborhood. If they need to sell due to a job loss, move, divorce, illness or any other reason, they may find that a short sale (or even a foreclosure) is the only way out because they owe their lender so much more than the home is now worth.
It’s a vicious cycle, and it looks like it will continue into 2011. The more distressed properties pour onto the market, the more prices will be pushed down, which makes it even harder for existing owners to keep their heads above water when it comes time to sell.
Sellers will need to price their homes more aggressively than ever in the new year if they want to find a buyer. And buyers (the few that remain ready with cash or strong enough credit to obtain a mortgage) will continue to find many excellent real estate bargains and low interest rates throughout Chicago in 2011.
Today the Illinois Assn. of Realtors released its October sales data, and WBEZ housing reporter Ashley Gross called me to discuss the latest grim numbers (listen to the WBEZ interview here).
In the city of Chicago, home sales fell nearly 40% in October compared to the same month a year ago, with 1,217 sales compared to 2,012 homes sold last October. Much of the decline, in my opinion, can be attributed to the death of the federal tax credit for home buyers. Buyers last year (and for the first four months of 2010) stood to reap thousands of free dollars from the federal government if they bought a home. But once the credits expired in April, so did much of the demand from home buyers.
In Chicago — as the local realtor associations like to point out — total home sales from January through October are still up 4.6% compared to the first 10 months of 2009. That’s true, and that’s good news. Overall, our local market found some stability in 2010.
However, all of that gain came in the early months of the year. Ever since the summer, we’ve watched sales volume wither. The story is much the same throughout the larger Chicago metropolitan area as well as Illinois as a whole.
But prices have plunged more steeply in Chicago than the rest of the state. The city’s median price in October 2010 was $183,000, a 14.9 % decline compared to $215,000 in October 2009. For the state as a whole, prices fell 6.5% over the past year.
As I told WBEZ, I don’t expect a recovery in 2011, not with so many foreclosures clogging our Chicago market. Home sellers need to price their properties accordingly if they want to attract a buyer — an increasingly rare species these days.
I was just reviewing the data on Chicago home listings and closings for the first week of November. I hate to say it, but even this unseasonably warm weather hasn’t kept our real estate market from going ice cold.
Far, far fewer homes are being sold now than at this time last year, according to the latest Chicago Association of Realtors stats. For example, during the first week of November last year, 555 sales of single-family houses, condos, or multi-unit buildings closed in Chicago. But this year? There were only 273 closings in the first week of November.
That’s a 50% drop in a single year! And this year, keep in mind, interest rates are significantly lower than they were last year, making this a better time to buy. So where are all the erstwhile Chicago buyers?
I suspect that many of them, if they were in a position to buy a home in 2010, already did so. Why wouldn’t they have bought in the spring, or even last year, to take advantage of the $8,000 federal tax credit for first-time buyers (or the $6,500 credit for other buyers)? That was when my business, and that of most other realtors I know, was running at a fever pitch as everyone scrambled to put deals together before the credits expired on April 30.
Since then, as the November data reflects, real estate has been slow. Prices have resumed their steady downward slide in most Chicago neighborhoods. Fewer buyers mean fewer closings — despite record low interest rates — and fewer closings mean sellers will face a tougher time than ever.
After all, Chicago property listings are continuing to hit the market, to the tune of nearly 1,000 per week! That is fewer listings than we saw this time last year, when 1,210 homes hit the market during the first week of November 2009. But it’s only a 19% drop in listings, compared to a staggering 50% drop in actual sales that closed.
Which means that if you want to sell your home anytime soon, you will be trying to thread an increasingly tiny needle. Please call me if you need a hand.
Chicago’s real estate market continues to gasp and wheeze this autumn, with the Illinois Association of Realtors reporting that homes sales fell 27% in September compared to the previous year. The city’s median price dropped like a stone as well, falling 20% — from $225,000 a year ago to $180,000 this September.
However, if you look at the entire year, things are a bit brighter. Thanks largely to the now-expired federal tax credit for home buyers, Chicago’s year-to-date sales jumped 11% during January through September 2010, compared to the same period in 2009. The year-to-date median home price fell 8%.
Looking ahead to the always-slow winter season, I would say that qualified buyers have a great opportunity to buy a home at both a stellar price and interest rate … but everyone else (sellers and existing homeowners) is in for a long, chilly slog towards spring.
The number of foreclosed homes, meanwhile, is soaring in Chicago. In fact, the Chicago metro region recently ranked third in the nation for foreclosures, with more than 12,000 foreclosed homes in the third quarter of 2010, behind only Phoenix and Miami. The Chicago area’s foreclosure activity jumped 35% in the third quarter, according to RealtyTrac, a company that tracks distressed properties.
Some of Chicago’s more affluent neighborhoods — like the Loop, West Loop, South Loop and Lincoln Park — have also seen large increases in foreclosures. In the Loop, for instance, there have been 205 foreclosure filings during the first nine months of the year, a 77% increase over the same period in 2009, according to data compiled by the Woodstock Institute, a non-profit research group based in Chicago.
The troubled buildings in the Loop include River City at 800 S. Wells, where there were 16 new foreclosure filings in the last three months; Century Tower at 182 W. Lake St. (nine foreclosure filings); Park Millennium at 222 N. Columbus Drive (six), according to the Woodstock Institute. In the South Loop, where many of the newer condo buildings have ended up filled with renters, a handful of buildings had two-thirds of the recent foreclosure filings: 1620 South Michigan Ave. (twelve); Vision on State at 1255 S. State St. (eleven); and 1720 South Michigan Ave. (eight).
Ouch. Once the tax credit expired, so did interest in buying homes. That’s the gist of the data released this week showing that home sales plunged in July, both in Chicago and nationwide.
Nationwide, the annual sales rate fell 25.5% in July over the previous year, according to the National Association of Realtors. The numbers were a little better in Chicago, where July home sales (single-family houses and condos) slid 19.5%. There were only 1,589 sales last month, compared to 1,975 homes sold in July 2009.
All the foreclosures clogging the Chicago market also helped to yank down prices. Chicago’s median home price was $196,500 in July, according to the Illinois Association of Realtors. That’s a drop of 19.8% over last July, when the median price was $245,000.
Genie Birch, president of the Chicago Association of Realtors, said that the abrupt drop in July home sales “seems consistent with what Chicago realtors anticipated for the summer, as buyers on the fence moved up their purchases to earlier in the season in order to qualify for the federal tax credits then offered to move-up or first-time home buyers. While it still remains a great time to buy, buyers are guarded as they consider their own financial stability and job security in the current market, hindering many from making a purchase.”
Statewide, homes sales fared even worse but prices held up better than in the city. Sales were down 29.7% in July compared to last year, and the median home price in Illinois fell 4.3% to $160,000. Illinois has been one of the hardest-hit regions in terms of both unemployment and foreclosures.
It looks like the wind has once again been knocked out of the sails for Chicago’s downtown condo market. Sales of new construction condos plunged 52% in the second quarter of 2010 compared to the same period last year, according to a new report from Appraisal Research, a real estate research firm based in Chicago.
Even compared to the first quarter of 2010 — when the federal government’s tax credits for home buyers were still in force — the numbers look pretty weak. There were 256 downtown Chicago condo sales in Q1, but only 150 sales — a 41% drop — in Q2 this year.
“With the tax credit expired, continued concerns about the economy and job market, worries about the stability of housing prices, and the difficulty in selling an existing residence and securing financing, many buyers continue to remain on the sidelines for the near term,” said the report.
It’s been a rather rude awakening for downtown developers, who once feasted on thousands of sales of glittering high-rise condos each year. In 2005, for example, developers sold more than 8,000 units in downtown Chicago. Last year they only sold 572. But the collapse means it’s a very attractive time to buy a new condo downtown, many of them with sweeping lake or city views, sleek gyms and swimming pools.
For the past few weeks, I’ve been taking out a pair of buyers to see many of the new 2-bedroom, 2-bath condos with lake views in Streeterville, and we’ve been pleasantly surprised by the prices. At 505 N McClurg, a snazzy building built in 2008 with floor-to-ceiling windows and beautiful finishes, a 2-bedroom, 2-bath unit that was priced at $554,500 last summer recently sold for $473,500. And with sales slumping, I expect to see even greater discounts ahead this fall.
- Sizzle is back in the South Loop
- How to Buy a Chicago Foreclosure (as Supply Steadily Shrinks)
- Home prices jump 15% in 2014, but cold weather chills sales
- Lincoln Square on a Tear as Average House Price Tops $600,000
- More choices ahead for Chicago buyers as rally cools