The Chicago real estate market approached a 25
year record in home sales
Once again the Chicago real estate market had an incredibly strong month in June. It came close to setting a 25 year (probably an all time) record in home sales. Let’s ignore the meaningless comp to 2020 and focus on the fact that June closings were 36.3% higher than June 2019. You can see just how dramatic this was in the graph below which has all the June data points flagged in red. In addition, the green 12 month moving average indicates that the last 12 months have been the highest in about 15 years (just eyeballing it). And note that, prior to the pandemic, home sales were in a downward trend.
While the sales of single family homes did jump significantly condo sales went up even more dramatically – 40.5%!
Contract activity also remained strong as you can see in the graph below, approaching a record high. The record was actually set last year after the initial shock of the pandemic wore off and the Chicago real estate market caught fire. It looks like last month was off all of 1.3% from last year. But the moving average line tells us that the last 12 months by far have had the strongest contract activity since I’ve been tracking it.
The homes that have gone under contract but have not yet closed end up in the pending home sales bucket. Eventually they will end up as closed sales so an increase in this number gives us plenty of good reasons to be optimistic about future sales. Last month was higher than the previous year (which was not negatively impacted by the pandemic) by 325 units.
As has been the case for some time – especially with the pandemic induced moratorium on foreclosures – the percentage of home sales that are distressed has dropped to miniscule levels. June came in a little higher than May at 1.6% but that’s quite a bit lower than last year’s 4.2%.
The inventory of homes available for sale in Chicago remains a constraint on the real estate market. I’m still using my own calculation because I think the standard reported metrics have issues and you can see just how crazy low it has been in the graph below. Detached home inventory was at a mere 1.7 month supply – near the lowest levels recorded and June is not typically the low point of the year. Attached inventory was a bit higher at 2.9 months but that’s still exceptionally low for condos in June.
With inventory so low it’s not surprising that detached homes sold in record time on average – only 40 days in June, down from 72 days in 2019. But half the homes sold in 10 days or less. That’s insane! I do think that when the market gets that fast it feeds on itself. Buyers tend to act faster and sellers get nervous when their home doesn’t sell right away so the price cuts come quicker.
Attached homes sold on average in 69 days, up slightly from 65 days in 2019, with a 21 day median.
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Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.