With 16 consecutive months of home sales DECREASES aNd inventory increases the Real estate Market on the north side continues to level out between buyers and sellers (but remains healthy).
My monthly analysis below (March 2018 vs 2019) shows that the market is slowing down a bit as March months of supply of inventory inched up to 4.8. (Anything under 6.0 is generally considered to be a seller’s market and anything above 6.0 a buyers market.)
Despite the slowdown there are elements of the market that are doing well.
Here are Five that are trending up:
1. Town Homes
With the price of single family homes rising, town homes are one of the most sought after alternatives for families that are out growing their one level flats. While smaller, they offer a single family home experience at a much lower price. The downside is that there is very little new town home construction in Lincoln Park & Lakeview. This is due to the fact that they require large tracks of land that are just not available. As a result, demand for town homes cannot keep up with supply. For seller’s this means low market times and high prices. For buyers the lack of new construction helps to ensure that town homes will be among appreciation leaders in the future. Lincoln Park town home median prices have risen 27.2 % this year to date.
2. Lower Interest Rates
While there have been some fluctuation in interest rates this year, the dire warnings of dramatic increases did not materialize. Just this week 30 year fixed conforming loans have dropped to 4.125%, while 30 year fixed jumbo loans are at 4.250%. In addition to rates being incredibly low, they give potential home owners more buying power.
3. Luxury Home Prices
The luxury market of homes has been slowly improving. New construction is moving from single family homes to multi unit buildings, opening up the market for the sale of existing homes and lowering inventories. Year to date median prices of homes priced over $1,000,000 are up 5.0%, while median prices for homes priced under $1,000,000 dropped 4.7% .
4. Major Construction Projects
Major construction projects such as Lincoln Yards and The 78 will transform former industrial sites on both the North and South sides into vibrant new neighborhoods. The long neglected Chicago river will become a new residential, retail and recreational focal point, producing much needed tax revenue from these long dormant sites. Developers promise that these new projects will bring new residents, businesses, tourism, jobs and add a new dimension to Chicago’s development.
5. End Of Mayoral Uncertainty
With 14 mayoral candidates there was a uncertainty in not knowing who was going to be in charge of addressing our major financial and social problems and how those problems were going to be solved. We now know who, but not necessarily how. Mayor Elect Lightfoot seems to have a strong understanding of the issues and promises innovative solutions. The stability and optimism of a strong mayor should help the real estate market for at least for the short term.
MARCH 2019 MARKET ANALYSIS
March 2019 vs 2018 – Cumulative Home Sales dropped 18.2%
NEAR NORTH - Down 24.8%
LINCOLN PARK -Down 7.4%
LAKEVIEW - Down 10.3%
NORTH CENTER - Down 33.3%
Sales of luxury homes (priced over $1,000,000) decreased 16.4%
Sales of homes priced from $500,000 to $1,000,000 decreased 36.2%
Sales of homes priced under $500,000 decreased 7.0%
HOMES UNDER CONTRACT
March 2019 vs 2018 – Cumulative Homes Under Contract decreased 3.5%
NEAR NORTH - Down 19.5%
LINCOLN PARK -Up 2.2%
LAKEVIEW - Up 3.6%
NORTH CENTER - Up 22.8%
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 2019 vs 2018 – Cumulative Inventories of homes rose 11.3%
NEAR NORTH - Up 11.3%
LINCOLN PARK - Up 20.3%
LAKEVIEW - Up 11.51%
NORTH CENTER - Down 9.4%
Luxury home inventories (priced over $1,000,000) increased 0.3%
Inventories of homes priced between $500,000 to $1,000,000 increased 1.1%
Homes priced under $500,000 saw inventory levels decrease by 7.5%
MONTHS OF SUPPLY OF INVENTORY
March 2019 vs 2018 – Cumulative Months of Supply of Inventories rose 17.1% to 4.8 MSI
NEAR NORTH - Up 24.1% to 6.7 MSI
LINCOLN PARK - Up 29.3% to 5.3 MSI
LAKEVIEW - Up 18.8% to 3.8 MSI
NORTH CENTER - Down 7.9% to 3.5 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 4.0% to 8.8 MSI
MSI of homes priced between $500,000 and $1,000,000 rose 20.5% to 5.3 MSI
MSI of homes priced under $500,000 rose 25.0% to 3.5 MSI
March 2019 vs 2018 – Cumulative Median Prices decreased by 9.0%
NEAR NORTH - Down 16.4%
LINCOLN PARK - Up 2.2%
LAKEVIEW - Down 15.7%
NORTH CENTER - Down 9.9%
Median prices of luxury homes priced over $1,000,000 increased 6.0%
Median prices of homes priced from $500,000 to $1,000,000 increased 1.1%
Homes priced under $500,000 decreased 7.5%
DAYS ON THE MARKET
March 2019 vs 2018 – Cumulative Average Days On The Market decreased 6.0 to 109 days
NEAR NORTH - Up 29% to 136 days
LINCOLN PARK - Up 5.4% to 98 days
LAKEVIEW - Down 4.2% to 91 days
NORTH CENTER - Down 5.2% to 109 days
Market time for luxury homes priced over $1,000,000 decreased 40.2% to 125 days (Lakeview has a 67.7 decrease in market time)
Homes priced between $500,000 and $1,000,000 posted a market time increase of 19.6% to 122 days
Market times for homes priced under $500,000 increased 18.3% to 97 days