Chicago home sales set a 15 year record in May
The Chicago real estate market continued its record setting pace in May, hitting a 15 year high in closed sales. You can clearly see it in the graph below, which has all the May values flagged in red. Also, note that the green 12 month moving average is higher than it has been in 14 or 15 years.
I won’t even bother to compare May to last year because the pandemic totally screwed up the market. However, May closings were 16.0% higher than in 2019 and the downward trend in sales that was in place at that time has now been forcefully terminated. Again, it’s condo sales that are almost exclusively driving the volume surge since detached homes are in such short supply (see below). Condo/ townhome sales were up almost 25% over 2019 levels.
And we can pretty much count on strong closings for at least the next couple of months since contract activity remains at record levels. I’ve only got 13 years of data in the graph below but May set a record for that time period and was 18.7% higher than May 2019. That also makes 12 months in a row with an increase in contract activity from the previous year.
Pending home sales (under contract, waiting to close) are also going to contribute to higher closings over the next couple of months. They are at the highest level in 5 years and 857 units above the 2019 level. That’s a lot when you consider that June will have somewhere in the neighborhood of 3000 closings.
The foreclosure moratorium is still keeping a lid on distressed sales as you can see in the graph below. May set a new record low of only 1.1% distressed sales, down from 5.3% last year.
The low number of homes on the market is exposing the flaws in the standard measure of months of supply of inventory so I continue to calculate the number myself, based upon homes for sale and same month contract activity. The result is graphed below and you can see that detached inventory is at a record low (1.4 months of supply) and attached inventory is at the lower end of the range for May (2.6 months of supply). So inventory remains tight for both types of properties but especially for detached homes.
The time it takes to sell a home in Chicago is at a record low for detached homes – down from 79 days on average in 2019 to just 50 days in May. But half these homes are selling in 10 days or less now, down from 30 days in 2019. On the other hand attached homes (condos/ townhomes) are taking longer to sell now – on average 81 days vs. 70 days in 2019. But half the attached homes are selling in 24 days or less, the same as in 2019.
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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.