After nine consecutive months of falling sales and rising inventories, there is little doubt that the incredible rebound from the 2008 recession is winding down.
The question is now: How do buyers and sellers navigate this new market.
The market is still healthy; however, rising inventories have leveled the playing field between buyers and sellers and we are settling into a “new normal” (see analysis below).
Regardless of market changes, there are still some great opportunities out there.
For Sellers: It’s all about price and presentation
As inventories rise, we have seen a dramatic drop in multiple offers and unusually short market times. As a result, realistic, competitive pricing is the key to the fastest and most profitable sale. Now is not the time to test a “stretch” price point, as it will inevitably lead to higher market times, which usually results in lower initial offers.
As the market becomes more competitive, the presentation of your home in print, on line and in person is equally as critical as price. Buyers who are seeing many competitive homes will see your home differently than you will. Make sure that you are looking at your home as a buyer would see it.
Consult with professionals who will tell you what you need to hear not just what they think you want to hear.
For Buyers: Take your time
For the past five years, many buyers have been faced with making offers without the time to fully analyze the property. In many cases buyers rushed to be the first to see a property, only to be forced to make a decision on the spot. Despite the speed of the offer, many still found themselves in multiple offer situations. While there will continue to be some unique properties that will require a speedy reaction, buyers for the most part, will have more time to to analyse and take the time necessary to make a more informed decision. Regardless of the price, home buying is not something that should be rushed and the current market gives buyers more time for due diligence.
August 2018 vs 2017 – Cumulative Home Sales dropped 3.3%
NEAR NORTH - Down 13.0%
LINCOLN PARK - Up 4.3%
LAKEVIEW - Up 4.9%
NORTH CENTER - Down 4.1%
Sales of luxury homes (priced over $1,000,000) increased 12.8%
Sales of homes homes priced from $500,000 to $1,000,000 increased 3.9%.
Sales of homes priced under $500,000 decreased 8.2%.
HOMES UNDER CONTRACT
August 2018 vs 2017 – Cumulative Homes Under Contract decreased 8.5%
NEAR NORTH - Down 14.6%
LINCOLN PARK - Down 7.4%
LAKEVIEW - Down 7.1%
NORTH CENTER - Up 15.2%
Noteworthy – Most home sales that closed in August 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
August 2018 vs 2017 – Cumulative Inventories of homes rose 7.8%
NEAR NORTH - Up 10.8%
LINCOLN PARK - Up 9.5%
LAKEVIEW - Up 2.4%
NORTH CENTER - Up 2.8%
Luxury home inventories increased for the first time in 9th months (up 1.6%).
Inventories of homes priced between $500,000 to $1,000,000 rose 5.8%.
Homes priced under $500,000 saw inventory levels increase by 11.0%.
MONTHS OF SUPPLY OF INVENTORY
August 2018 vs 2017 – Cumulative Months of Supply of Inventories rose 11.9% to 4.7 MSI
NEAR NORTH - Up 13.0% to 6.1 MSI
LINCOLN PARK - Up 14.3% to 4.8 MSI
LAKEVIEW - Up 5,9% to 3.6 MSI
NORTH CENTER - Up 7.7% to 4.2 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 10th consecutive month to 6.6 MSI (8.9 MSI last year).
MSI of homes priced between $500,000 and $1,000,000 increased 3.3% to 6.1 MSI.
MSI of homes priced under $500,000 rose 13.8% to 3.3 MSI.
The market continues to level out between buyers and sellers, as MSI of homes priced under $1,000,000 continue to fall while MSI of lower priced homes continue to rise.
August 2018 vs 2017 – Cumulative Median Prices increased by 3.9%
NEAR NORTH - Up 1.8%
LINCOLN PARK - Down 6.7%
LAKEVIEW - Up 11.2%
NORTH CENTER - Up 2.3%
Median prices of luxury homes priced over $1,000,000 increased 7.3%.
Median prices of homes priced from $500,000 to $1,000,000 decreased 1.8%.
Homes priced under $500,000 decreased 9.6%.
DAYS ON THE MARKET
August 2018 vs 2017 – Cumulative Average Days On The Market decreased 9.7% to 65 Days
NEAR NORTH - Up 31.3% to 84 days
LINCOLN PARK - No Change at 73 days
LAKEVIEW - Down 12.3% to 50 days
NORTH CENTER - Down 42.6% to 54 days
Market time for luxury homes priced over $1,000,000 decreased 34% to 99 days.
Homes priced between $500,000 and $1,000,000 posted market time decreased 19.% to 76 days.
Market times for homes priced under $500,000 increased 5.8% to 55 days.