It’s a roller coaster, marked by soaring interest rates, rising home prices, and a great shortage of listings.
31-Aug-22 – Who but God Himself could understand and interpret the post-COVID real estate market on Chicago’s North Side?
According to Baird & Warner’s August 2022 Market Analysis for Chicago’s North Side, home sales have declined for the past five consecutive months, compared to 2021, because of the impact of COVID-19, rising home loan interest rates, a declining stock market, high gas prices, and rampant crime.
Then, Baird & Warner managing broker David Bailey suggested that Irwin compare 2022 numbers with 2019, which was the last “normal” year before COVID-19.
“The results were interesting and put our current market in a different perspective,” Irwin said. “The purpose of this exercise is not to try to ‘put lipstick on a pig,’ but rather to compare what is happening in this unpredictable market to a more stable time.”
Listing inventory. Year-to-date listing inventory levels are down 25 percent from 2019. While the existing home sales industry faces a number of challenges, Irwin said sinking inventory levels continue to be one of the major issues.
“It should be noted that while inventory levels are dropping compared to 2021, they are slowly rising when compared month-over-month in 2022,” Irwin said. “A significant number of homes are being sold, prices are up, and market times are down. As inventories rise, we should see some impressive results.”
Here is a list of median pricing for homes sold in July 2022 in the four neighborhoods surveyed:
Near North Side. Overall, resale home prices rose 1.5 percent. However, prices of homes and condominiums priced under $500,000 declined 2.1 percent.
Lincoln Park. While overall resale dwelling prices declined 2.4 percent, homes priced from $500,000 to $1 million rose 0.3 percent.
Lakeview. Resale home prices rose a solid 5.5 percent. However, resale prices of luxury homes priced from $1 million to $2 million declined 7.7 percent.
North Center. Resale home prices rose a whopping 14.8 percent in July. However, the median price of luxury units priced at more than $2 million dropped 4.4 percent.
Home loan rates jump to 5.5 percent
On August 25, benchmark 30-year fixed home loan interest rates rose to 5.55 percent from 5.13 percent a week earlier, reported Freddie Mac’s Primary Mortgage Market Survey. A year ago, 30-year loans averaged 2.87 percent.
Fifteen-year fixed mortgages averaged 4.85 percent on August 25, up from 4.55 percent a week earlier. A year ago, 15-year loans averaged 2.17 percent.
The Freddie Mac survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit.