After eight consecutive months of falling sales and rising inventories, it appears that we will see MorE of the same for Fall 2018, as the market levels off from the rebound of the 2008 REcession.
The Question Remains: What is causing the slow down?
While there are positive influences on the North Side real estate market, rising crime, rising property taxes and economic/pubic school instability are all factors that are lurking in the background. The upcoming Mayoral primary could ease some of these concerns or exacerbate them.
The enormous influx of new rental units into the market in the next few years; however, could have the most significant impact on Chicago real estate.
There are over 7,000 new rental units due to hit the Chicago market in the next 2 years, with many more in the planning stages.
In Lincoln Park alone, over 831 new rental units will become available on Lincoln Avenue between Fullerton and Wrightwood by 2019.
While the luxury market is improving, the mid and lower price points are struggling. It would be fair to ask if potential mid and lower price buyers are opting for new construction high amenity rentals instead of buying.
The short term answer is most definitely yes, but we will have to wait and see to what extent this huge rental influx will affect the market in the long term.
July 2018 vs 2017 – Cumulative Home Sales Showed No Change.
NEAR NORTH - Down 5.4%
LINCOLN PARK - Down 13.0%
LAKEVIEW - Up 8.8%
NORTH CENTER - Up 22.1%
Sales of luxury homes (priced over $1,000,000) Increased 4.4% .
Sales of homes homes priced from $500,000 to $1,000,000 increased 12.7%.
Sales of homes priced under $500,000 decreased 6.7%.
HOMES UNDER CONTRACT
July 2018 vs 2017 – Cumulative Homes Under Contract decreased 4.4%.
NEAR NORTH - Down 9.4%
LINCOLN PARK - Down 4.8%
LAKEVIEW - Up 2.7%
NORTH CENTER - Down 4.8%
Noteworthy – Most home sales that closed in July 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
July 2018 vs 2017 – Cumulative Inventories of homes rose 9.5%.
NEAR NORTH - Up 12.9%
LINCOLN PARK - Up 9.0%
LAKEVIEW - Up 5.3%
NORTH CENTER - Up 5.1%
While the cumulative inventory levels rose in July, the results varied widely by price point.
The increase was driven by homes priced under $1,000,000.
Luxury home inventories decreased for the 9th consecutive month (down 32.7% in July).
Inventories of homes priced between $500,000 to $1,000,000 rose 14.3%.
Homes priced under $500,000 saw inventory levels increase by 14.3%.
MONTHS OF SUPPLY OF INVENTORY
July 2018 vs 2017 – Cumulative Months of Supply of Inventories rose 11.6% to 4.8 MSI.
NEAR NORTH - Up 12.7% to 6.2 MSI
LINCOLN PARK - Up 11.9% to 4.7 MSI
LAKEVIEW - Up 5,7% to 3.7 MSI
NORTH CENTER - Up 12.8% to 4.4 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 9th consecutive month to 8.9 MSI (9.9 MSI last year).
MSI of homes priced between $500,000 and $1,000,000 increased 18.6% to 5.1 MSI.
MSI of homes priced under $500,000 rose 13.8% to 3.3 MSI.
While most of these numbers are still in the range of a seller's market, MSI of homes priced under $1,000,000 continue to fall while MSI of lower priced homes continue to rise.
July 2018 vs 2017 – Cumulative Median Prices increased by 2.1%.
NEAR NORTH - Up 6.3%
LINCOLN PARK - Up 11.3%
LAKEVIEW - Down 1.0%
NORTH CENTER - Down 6.2%
Median prices of luxury homes priced over $1,000,000 increased 6.5%.
Median prices of homes priced from $500,000 to $1,000,000 decreased 3.3%.
Homes priced under $500,000 increased 4.3%.
DAYS ON THE MARKET
July 2018 vs 2017 – Cumulative Average Days On The Market increased 3.5% to 59 Days.
NEAR NORTH - Up 41.4% to 82 days
LINCOLN PARK - Down 13.1% to 53 days
LAKEVIEW - Down 13.5% to 45 days
NORTH CENTER - Down 1.8% to 57 days
Market time for luxury homes priced over $1,000,000 increased 37.2% to 129 days. This was driven by a 41.4% increase in Near North Side.
Homes priced between $500,000 and $1,000,000 posted market time decreased 7.0% to 53 days.
Market times for homes priced under $500,000 decreased 6.3% to 44 days.