23-Jul-18 – The Great Recession’s downward push on existing home, townhome, and condominium prices in the Chicago area finally has ended, experts say.

In the first half of 2018 the median sales price of homes, condos, co-operative apartments, and townhomes in the seven-county Chicago metro area rebounded to the high ground it attained before the housing crash, according to a new report by RE/MAX of Northern Illinois.

Between January and June 2018, the median home sales price in the Chicago area hit $250,000, equaling the median price for the same period in 2006 and 2008 and falling just $4,000 – 1.6 percent – below the 2007 figure, RE/MAX reported.

The median home sales price in 2018 rose 4.2 percent over the median price in the first half of 2017. However, home sales activity in the Chicago area declined 3.4 percent to 56,285 units in the first half of 2018. Sales of detached homes reached 35,147 units, while some 21,138 condos, co-ops, and townhomes were sold.

Home loan rates creep

This strong home sales activity occurred during a period of interest rate creep, analysts said. On July 19, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home loan rates averaged 4.52 percent. At the beginning of 2018, the 30-year fixed loan rate averaged 3.95 percent. A year ago at this time it averaged 3.96 percent.

On July 19 Chicago-area lenders were charging a range of 4.256 to 4.484 percent on 30-year fixed-rate mortgages, reported RateSeeker.com.

In Chicago, total detached and attached home sales reached 14,172 units in the first half of 2018. Condo, co-op, and townhome sales accounted for 8,796 units, while 5,376 traditional detached single-family homes changed hands.

Chicago condo price gains are modest

Chicago recorded both the smallest decline in condo, co-op, and townhome sales – just a 0.5 percent drop in unit sales – and the narrowest increase in median price, a modest gain of 1.7 percent. The median is a typical market price where half of the homes sold for more and half sold for less.

In Cook County, total detached and attached home sales reached 31,155 units in the first half of 2018. Home sales accounted for 16,677 units, while 14,478 condos, co-ops, and townhomes changed hands.

The first half of this year has been challenging for home buyers and real estate brokers in the Chicago area, especially entry-level properties priced at up to $300,000. According to Jeff LaGrange, vice president of RE/MAX of Northern Illinois, sales of homes priced under $300,000 were down 7.2 percent in the first half of the year. At the same time, the number of homes selling for more than $300,000 rose by 2.6 percent.

“The major reason for the difference is that the supply of homes priced at $300,000 or more is considerably larger, relative to demand, than is the supply of lower-priced homes,” said LaGrange (left).

Relief from the tight home inventory conditions plaguing Chicago and many other markets is not expected, according to Freddie Mac’s chief economist, Sam Khater.

RE/MAX reported that the average market time, which is the length of time a home is listed for sale but has yet to go under contract, was also lower across the metro area – 80 days this year, versus 87 days a year ago.

The number of homes for sale on June 30 was one percent higher, but listings of single-family homes declined 2.7 percent from the year-earlier number. The 34,040 homes on the market equaled a 2.6-month supply based on the pace of June sales.

However, the inventory picture does have a bright side. The supply of condos, co-ops, and townhomes, according to LaGrange, is now 11 percent higher than it was a year ago.

Fewer homes sold in Chicago from year ago

Metro Chicago home sales in June 2018 totaled 13,155 units, a decline of 5.8 percent from June 2017. The median sales price for the month was $265,000, a gain of 3.9 percent. Sales of single-family homes fell 5.7 percent, while the number of condos, co-ops, and townhomes sold declined 5.9 percent.

The home sales data used for the RE/MAX analysis is collected by Midwest Real Estate Data LLC, the regional multiple listing service. It covers detached and attached homes in Cook, DuPage, Kane, Kendall, Lake, McHenry, and Will counties.