Despite the Market numbers below, North Side Real estate remains healthy; however, February (2019 vs 2018) continued a 15 consecutive month trend of declining Home sales and rising inventories.
1. Buyer Opportunities
As inventory levels continue to rise, buyers are finding new opportunities.
Increased selection and options are giving buyers more choices in property types and neighborhoods.
Mounting market times and competing homes are forcing sellers to be more flexible in their pricing expectations.
The sense of urgency that low inventory levels of the past created, has been replaced with a more relaxed market for buyers. This is allowing them to take the time necessary to do their due diligence before making an offer.
2. Seller Opportunities
Despite falling sales and rising inventories, there are a lot of homes being sold and in most cases it is still considered a seller’s market.
Many buyers are having a difficult time finding what they want due to a glut of old inventory that is over priced and not in pristine showing condition.
Informed sellers are recognizing the changes in the market. Those that are listing their homes with competitive pricing and taking the extra time and effort to prepare their home for sale are finding a very active market.
3. Favorable Interest Rates
While there have been some fluctuation in interest rates, the dire warnings of the past year of dramatic increases did not materialize. 30 year fixed conforming and jumbo loans are currently at 4.25%. It appears that rates will stay low for the remainder of the year.
“LOOK OUT FOR”
1. Rising Taxes and Financial Instability
It is no secret that the City & State have major financial problems, the biggest being the pension deficit that is now in the billions of dollars. These issues are going to have to be addressed and so far there has been very little discussion in the mayoral race as to viable solutions by either candidate. In the past, financial problems have been put on the backs of home owners, in the form of increased property taxes.
The fear of significant property tax increases is making some existing home owners consider a move to the suburbs and many first time home buyers considering renting vs owning.
2. Perception Of Rising Crime
With all of the negative publicity that Chicago receives about crime, the reality of the situation is that crime has dropped in 2018 in 7 of the 8 categories that the Chicago Police Department tracks. Murder and shootings, for example, have declined 15% from 2017 (although current levels are outrageously unacceptable).
It is the perception that crime is rising, that is having an adverse affect on real estate. I think that it would be fair to say that few Chicagoans feel safer today than in the past.
Concern for personal safety combined with the the economic problems mentioned above are making some families consider a move out of the city.
The instability of the current mayoral elections is also causing buyers and sellers concern for the future.
3. Influx Of New Construction Rental Homes
Chicago is experiencing an explosion of thousands of new construction luxury rentals, with many more coming on line in the next few years. While this is transforming the city into a fantastic rental market, it is also luring many first time home buyers to consider renting as opposed to buying. - READ MORE
In addition to new construction and luxury amenities, these rentals offer tenants flexibility for the future and a soft buffer against the economic instability mentioned above.
The bad news is that the move to rentals may cut into sales of homes to first time home buyers and other demographics.
The incredible rebound from the 2008 recession which heavily favored sellers due to low inventories, has now transformed into a more balanced market. As the market levels off, buyers and sellers will have to make adjustments to the “new normal”.
February 2019 vs 2018 – Cumulative Home Sales dropped 9.5%
NEAR NORTH - Down 16.7%
LINCOLN PARK -Up 12.7%
LAKEVIEW - Down 17.9%
NORTH CENTER - Up 3.0%
Sales of luxury homes (priced over $1,000,000) increased 7.1%
Sales of homes priced from $500,000 to $1,000,000 decreased 23.5%
Sales of homes priced under $500,000 increased 2.3%
HOMES UNDER CONTRACT
February 2019 vs 2018 – Cumulative Homes Under Contract decreased 1.8%
NEAR NORTH - Down 12.9%
LINCOLN PARK -Up 2.4%
LAKEVIEW - Down 5.4%
NORTH CENTER - Up 52.0%
Noteworthy – Most home sales that closed in February 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
February 2019 vs 2018 – Cumulative Inventories of homes rose 12.0%
NEAR NORTH - Up 18.0%
LINCOLN PARK - Up 32.4%
LAKEVIEW - Up 24.1%
NORTH CENTER - Down 2.7%
Luxury home inventories (priced over $1,000,000) increased 4.1%
Inventories of homes priced between $500,000 to $1,000,000 increased 11.6%
Homes priced under $500,000 saw inventory levels increase by 20.2%
MONTHS OF SUPPLY OF INVENTORY
February 2019 vs 2018 – Cumulative Months of Supply of Inventories rose 18.0% to 4.5 MSI
NEAR NORTH - Up 18.0% to 5.9 MSI
LINCOLN PARK - Up 32.4% to 4.9 MSI
LAKEVIEW - Up 24.1% to 3.6 MSI
NORTH CENTER - Down 2.7% to 3.6 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 rose 7.5% to 8.6 MSI
MSI of homes priced between $500,000 and $1,000,000 rose 12.2% to 4.6 MSI
MSI of homes priced under $500,000 rose 32.0% to 3.3 MSI
February 2019 vs 2018 – Cumulative Median Prices decreased by 10.4%
NEAR NORTH - Down 10.7%
LINCOLN PARK - Up 4.7%
LAKEVIEW - Down 15.8%
NORTH CENTER - Down 19.9%
Median prices of luxury homes priced over $1,000,000 increased 17.6%
Median prices of homes priced from $500,000 to $1,000,000 decreased 9.6%
Homes priced under $500,000 decreased 6.4%
DAYS ON THE MARKET
February 2019 vs 2018 – Cumulative Average Days On The Market increased 6.3% to 118 days
NEAR NORTH - Up 11.4% to 152 days
LINCOLN PARK - Up 20.5% to 106 days
LAKEVIEW - Down 0.9% to 106 days
NORTH CENTER - Down 4.5% to 107 days
Market time for luxury homes priced over $1,000,000 increased 2.0% to 201 days
Homes priced between $500,000 and $1,000,000 posted a market time decrease of 2.0% to 113 days
Market times for homes priced under $500,000 increased 18.8% to 101 days