Falling Home sales in Lincoln Park, Near North, Lakeview and North Center Make April 2018 a key month.
With four consecutive months of year over year decreases in home sales, a closer look at the market is needed in order to understand all of the components that are having an affect.
Sales of homes priced under $500,000 have been dropping since November 2017. While we have been attributing this to low inventory levels, the influx of new construction luxury rentals on the North Side and in new trendy neighborhoods such as West Loop, Fulton Market and South Loop could be enticing some potential buyers to rent instead of buy.
The literally thousands of new rental units coming on the market in the next few years should have a significant affect on both rental and sales markets in Chicago.
The luxury market of homes over priced $1,000,000 has had a positive turnaround with lower inventory levels and months of supply of inventory from a year ago; however, sales, market times and median prices continue to be erratic.
Home priced between $500.000 and $1,000,000 seem to be having the most difficult time with sales dropping, inventories and market times rising, and only modest increases in median prices.
Inventory levels, rising interest rates, expanding rental options and the perception of rising crime have all been given as reasons for the slow start to 2018.
This is still a healthy market ;however, buyers and particularly sellers need to understand what is happening with their specific property types and neighborhoods.
There are some great opportunities out there, but buyer strength seems to be gaining in what has been a strong seller's market for the past five years.
March 2018 vs 2017 – Cumulative Home Sales dropped 10.0%.
NEAR NORTH - Down 1.6%
LINCOLN PARK - Down 21.2%
LAKEVIEW - Down 11.8%
NORTH CENTER - Down 12.3%
Sales of luxury homes (priced over $1,000,000) dropped 18.6% .
Sales of homes homes priced from $500,000 to $1,000,000 dropped 9.3%.
Sales of homes priced under $500,000 dropped 11.2%.
HOMES UNDER CONTRACT
March 2018 vs 2017 – Cumulative Homes Under Contract decreased 2.4%.
NEAR NORTH - Up 3.1
LINCOLN PARK - Up 7.2%
LAKEVIEW - Down 12.5%
NORTH CENTER - Down 6.6%
Noteworthy – Most home sales that closed in March went under contract in a previous month. Units Under Contract can reflect a more accurate picture of the current month, although not every home that goes under contract closes.
HOMES FOR SALE
March 2018 vs 2017 – Cumulative Inventories of homes rose 1.8%.
NEAR NORTH - Up 8.1%
LINCOLN PARK - Up 4.1%
LAKEVIEW - Down 3.9%
NORTH CENTER - Down 19.0%
While the cumulative inventory levels rose slightly in March, the results varied by price point.
Luxury home inventories showed a decrease of 10.2% for the fifth consecutive month.
Inventories of homes priced between $500,000 to $1,000,000 increased 13.3%.
Homes priced under $500,000 saw inventory levels increase by 5.3%.
MONTHS OF SUPPLY OF INVENTORY
March 2018 vs 2017 – Cumulative Months of Supply of Inventories rose 2.6% to 3.9 MSI.
NEAR NORTH - Up 8.3% to 5.2 MSI
LINCOLN PARK - Up 5.4% to 3.9 MSI
LAKEVIEW - No Change 3.0 MSI
NORTH CENTER - Down 13.2% to 3.3 MSI
Traditionally, MSI over 6.0 designates a buyer’s market and under 6.0 a seller’s market.
MSI of luxury homes priced over $1,000,000 dropped for the fifth consecutive month to 7.8 MSI. An incredible 25.0% drop over last year.
MSI of homes priced between $500,000 and $1,000,000 increased 16.6% to 4.2 MSI.
MSI of homes priced under $500,000 rose 13.0% to 2.6 MSI.
While these numbers are still well in the range of a seller's market, MSI of homes priced between $500,000 and $1,000,000 are slowly increasing and having a negative affect on the market.
March 2018 vs 2017 –Cumulative Median Prices increased 5.4%.
NEAR NORTH - Up 1.6%
LINCOLN PARK - Up 8.3%
LAKEVIEW - Up 0.1%
NORTH CENTER - Down 13.2%
Median prices of luxury homes priced over $1,000,000 decreased 1.2%.
Median prices of homes priced from $500,000 to $1,000,000 increased 1.9%.
Homes priced under $500,000 increased 7.6%.
DAYS ON THE MARKET
March 2018 vs 2017 – Cumulative Average Days On The Market rose 5.3% to 100 days.
NEAR NORTH - Up 11.6% to 106 days
LINCOLN PARK - Down 1.1% to 92 days
LAKEVIEW - Up 12.8% to 97 days
NORTH CENTER - Down 1.9% to 105 days
Market time for luxury homes priced over $1,000,000 increased 46% to 205 days. (This was driven by a 165% increase in Lakeview and we are verifying this number).
Homes priced between $500,000 and $1,000,000 posted market time increases of 3.2% to 98 days.
Homes priced under $500,000 reported no change at 81 days.