October 2019 & YTD Market Analysis For Chicago's North Side

OVERVIEW

What should the level of concern be, as SEPTEMBER 2019 represented the 23rd consecutive month of home sale DECREASES aNd inventory increases on the Near North side, Lincoln Park, Lakeview & North Center?

September 2019 vs 2018 - Home sales dropped 2.0%, while inventories rose 3.7%. This increased the months of supply of inventory 9.4% to 5.8 MSI. Median prices which are down slightly for 2019, rose 0.1% in September, while market times increased 21.9% to an average of 89 days.

Before you panic, there are a number of factors that should be considered as you look at the YTD analysis below.

The market has changed dramatically in the past few years and even months; however, for the past 29 years we have moved from boom market to bust market and back to boom market. This appears to be the first time since the 1990’s that we are entering a balanced “normal market”. We have become so accustomed to extreme highs an lows that “normal & balanced” now seem to be slow and disappointing.

1990 - 2006 - The building boom on Chicago’s North Side during this period was unprecedented. New construction hit record highs while a bubbling economy and questionable lending practices produced a frenzied real estate market for both buyers and sellers.

2007 - 2012 - The economic collapse of the economy, fueled in part by these same unstable lending practices, produced the worst recession since the 1920’s. On Chicago’s North Side, home prices plunged, foreclosures became common place and the real estate market was in free fall.

2013 - 2017 - As quickly as the market crashed, it seemed to come roaring back in January of 2013. Pent up buyer demand of almost 6 years caught virtually everyone by surprise. Historically high inventories began to disappear at extremely high rates and it wasn’t until 2015 that developers were able to identify what was actually happening and respond with new construction. As a result of low inventories and high demand, sellers were in complete control with multiple offers and record low market times.

2017 - Present - We have now worked through most of post recession demand and high construction costs have slowed some new construction projects. Fear of additional property tax increases, perception of rising crime and an unprecedented influx of new construction luxury rental properties have all contributed to a gradual slowdown in the real estate market.

Summary - We are now approaching what many consider to be a balanced market between buyers and sellers. Based on the extremes of the past 29 years we have not experienced a “normal balanced” market in quite some time. It may not be as dramatic as past markets, but with low interest rates and relatively stable median prices there are significant opportunities for both buyers and sellers.


HOME SALES

September YTD 2019 vs 2018 - Cumulative Home Sales - Down 8.8%

By Neighborhood

NEAR NORTH - Down 13.9%

LINCOLN PARK - Up 4.8%

LAKEVIEW - Down 11.9%

NORTH CENTER - Down 5.8%

By Price Point :

Over $1,000,000 - Down 4.1%

$500,000 to $1,000,000 - Down 12.1%

Under $500,000 - Down 8.1%

Noteworthy - Despite a cumulative drop of 8.8 % in sales for the past six months, Lincoln Park reported a 4.8% increase


HOMES UNDER CONTRACT

September YTD 2019 vs 2018 - Cumulative Homes Under Contract - Down 7.6%

By Neighborhood

NEAR NORTH - Down 12.4%

LINCOLN PARK - Up 1.4%

LAKEVIEW - Down 9.5%

NORTH CENTER - Down 1.0%

By Price Point :

Over $1,000,000 - Down 7.3%

$500,000 to $1,000,000 - Down 9.7%

Under $500,000 - Down 5.4%

Noteworthy : Most home sales that closed in September 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

September YTD 2019 vs 2018 - Cumulative Homes For Sale - Up 11.9%

By Neighborhood

NEAR NORTH - Up 11.9%

LINCOLN PARK - Up 10.1%

LAKEVIEW - Up 16.9%

NORTH CENTER - Down 1.1%

By Price Point :

Over $1,000,000 - Down 0.9%

$500,000 to $1,000,000 - Up 16.6%

Under $500,000 - Up 16.8%


MONTHS OF SUPPLY OF INVENTORY

September YTD 2019 vs 2018 - Cumulative MSI - Up 22.0% to 5.0 MSI

By Neighborhood

NEAR NORTH - Up 25.9% to 7.3 MSI

LINCOLN PARK - Up 22.0% to 5.0 MSI

LAKEVIEW - Up 29.0% to 4.0 MSI

NORTH CENTER - Up 2.9% to 3.5 MSI

By Price Point :

Over $1,000,000 - Up 8.9% to 9.7 MSI

$500,000 to $1,000,000 - Up 22.9% to 5.9 MSI

Under $500,000 - Up 25.8% to 3.9 MSI

Noteworthy: Traditionally, MSI over 6.0 designates a buyer’s market and under 6.0 a seller’s market. 


MEDIAN PRICING

September YTD 2019 vs 2018 - Cumulative Median Prices - Down 2.5%

By Neighborhood

NEAR NORTH - Down 4.8%

LINCOLN PARK - Up 0.5%

LAKEVIEW - Down 3.8%

NORTH CENTER - Up 0.4%

By Price Point :

Over $1,000,000 - Up 1.6%

$500,000 to $1,000,000 - Down 0.3%

Under $500,000 - No Change




DAYS ON THE MARKET

September YTD 2019 vs 2018 - Cumulative Market Time - Up 12.2% To 87 days

By Neighborhood

NEAR NORTH - Up 18.3% to 110 days

LINCOLN PARK - Up 13.3% to 85 days

LAKEVIEW - Up 20.6% to 76 days

NORTH CENTER - Down 2.5% to 77 Days

By Price Point :

Over $1,000,000 - Up 7.5% to 143 Days

$500,000 to $1,000,000 - Up 14.5% to 95 Days

Under $500,000 - Up 12.9 % to 70 Days


YOUR HOME

A logical question would be “how does all of this this affect the home that I am planning to sell or potentially buy?”

Every home is unique and a detailed analysis of your property and neighborhood is a necessity to fully understand the true market value.

There are many criteria both objective and subjective that must be analyzed in order to get a true picture.

Internet home pricing sites that claim to calculate your home’s value use algorithms that are often wildly inaccurate, as are many market analyses from real estate agents that have not taken the time to personally tour the home.

Whether you are buying or selling a home, I would welcome the opportunity to have a conversation about your real estate needs, goals and expectations.