Chicago Real Estate Market Update: 2nd Highest May Sales In 16 Years

Chicago Real Estate Market Update: 2nd Highest May Sales In 16 Years

Second highest home sales compared to last
May’s record is not a disappointing outcome

It’s still relatively early in this cycle of increasing mortgage rates but so far closings have not really been impacted. There’s a bit more to this story below but, in the meantime, check out this graph and remember that last May set a blow out record for home sales. So when I tell you that this May’s sales were down by 1.8% that’s actually really impressive. It was up 14.0% from 2019 and it was the second highest sales in 16 years. This is one of those times when coming in second is nothing to frown about.

As usual the Illinois Association of Realtors will report slightly weaker sales than me in two weeks. They will come in with a 4.5% decline.

Chicago home sales had 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 2020 and is now at near record levels.

Chicago Home Contract Activity

However, the rest of the story is in the contract activity, which is starting to show signs of weakness and it’s a leading indicator of sales, right? May was the third month in a row of fairly significant and increasing declines in contracts written. You can see it clearly in the moving average line in the graph below. May contracts were down 18.6% from last year and only up slightly from the 2019 level. You would think that eventually this would show up in lower sales figures.

Chicago home sale contract activity is still at the high end of the historic range

Pending Chicago Home Sales

What’s been keeping the lower contract figures from translating into lower sales is a backlog of pending sales which has been drawing down for about a year now. You can see that in the graph below – check out the moving average line. May’s pending home sales were down 1455 units from the previous year and 328 units from April. That’s pretty significant when  you consider that May sales were 3291 units. But there are limits to how much more we can go to the “well” for additional sales.

After hitting historic lows the backlog of homes likely to close in the next 1 – 2 months rebounded during the pandemic but is now starting to retreat again

Distressed Chicago Home Sales

I’ve been talking about how foreclosure activity has been fairly muted since the expiration of the foreclosure moratorium so it’s no surprise that the percentage of distressed sales remains pretty low. However, it has been ticking up slightly lately. May came in with only 2.2% distressed sales compared to an even lower 1.1% last year. You can see the trend in the graph below. But I don’t think the percentage is going to go much higher, given the low level of foreclosure activity.

Since the housing crisis the percentage of home sales that are distressed has steadily declined to almost negligible levels.

Chicago Home Inventory

The strength of the market can be measured by the supply/ demand imbalance as summed up in the months of supply. Both detached and attached homes keep hitting new lows. Detached inventory was the same as last year with a 1.9 month supply while attached inventory fell to 2.3 months vs. 2.8 last year. Just glancing at the graph you can see how 5 months was a more typical number once we got past the housing crash and that is generally seen as a more balanced market.

After a big Coronavirus induced spike in April 2020 the inventory of homes for sale dropped back down. Both detached and attached inventory keep setting new record lows.

Chicago Home Sale Market Times

How long it takes to sell a home is also a great indicator of the strength of a market and again we’re seeing some positive signs. Attached market times are fairly low at 59 days on average – down from 81 days last year – but, as you can see in the graph, that’s not a record. On the other hand detached market times of 46 days is a record low and that is down from 50 days last year.

When the pandemic first hit Chicago market times rose but they quickly recovered and are now hitting record lows.

#RealEstate #ChicagoRealEstate

Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.

Enter your email address:Delivered by FeedBurner
Advertisement:
Advertisement:

Welcome to ChicagoNow.

Meet
our bloggers,

post comments, or

pitch your blog idea.

Getting Real On Facebook

Subscribe To Getting Real

 RSS Feed

Enter your email address:

Delivered by FeedBurner


Google

Meet The Blogger

Gary Lucido

After 20 years in the corporate world and running an Internet company, Gary started Lucid Realty with his partner, Sari. The company provides full service, while discounting commissions for sellers and giving buyers rebates.

Featured Posts

How Realtor’s Lie To Get Your Business
The #1 Myth About Selling Your Home
The #2 Myth About Selling Your Home

Tags

market conditions (587)
Chicago home prices (239)
Case Shiller index (153)
Chicago foreclosures (138)
industry issues (92)
Chicago monthly real estate market update (92)
real estate agents (66)
Chicago real estate market (64)
foreclosures (60)
Neighborhood news (59)

Monthly Archives

June 2022
May 2022
April 2022
March 2022
February 2022
January 2022
December 2021
November 2021
October 2021
September 2021
August 2021
July 2021
June 2021
May 2021
April 2021
March 2021
February 2021
January 2021
December 2020
November 2020
October 2020
September 2020
August 2020
July 2020
June 2020
May 2020
April 2020
March 2020
February 2020
January 2020
December 2019
November 2019
October 2019
September 2019
August 2019
July 2019
June 2019
May 2019
April 2019
March 2019
February 2019
January 2019
December 2018
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010

Blogroll

Getting Real’s favorite blogs

Crib Chatter
Real Estate Decoded
Smart Mortgage Advice
The Real Deal – Chicago

Latest on ChicagoNow

Chicago Real Estate Market Update: 2nd Highest May Sales In 16 Years

from Getting Real by Gary Lucido
posted today at 11:28 am

Arizona John thinks I have become unlikeable

from The Chicago Board of Tirade by Bob Abrams
posted today at 10:20 am

Early Reading Should Be One Thing: Fun

from Getting More From Les by lesraff
posted today at 9:26 am

JW MARRIOTT DESERT SPRINGS RESORT & SPA LAUNCHES GARDEN COLLABORATION WITH LILY KWONGJW

from The Good Life by Eraina Davis
posted today at 6:11 am

Watch 2023 Chicago Mayoral candidate Paul Vallas discuss w/Berkowitz how to fix Chicago’s skyrocketing violent crime, largely failing schools, burdensome property taxes & almost insoluble pension problems, Cable & Web

from Public Affairs with Jeff Berkowitz by Jeff Berkowitz
posted Monday at 7:11 pm

Read these ChicagoNow blogs

Cubs Den

Chicago Cubs news and comprehensive blog, featuring old school baseball writing combined with the latest statistical trends

Pets in need of homes

Pets available for adoption in the Chicago area

Hammervision

It’s like the couch potato version of Mr. and Mrs. Smith.
Advertisement:

About ChicagoNow

FAQs

Advertise

Recent posts RSS

Privacy policy (Updated)

Comment policy

Terms of service

Chicago Tribune Archives

Do not sell my personal info

©2022 CTMG – A Chicago Tribune website –
Crafted by the News Apps team

Read More

Leave a Comment

Your email address will not be published.