Crain’s Chicago Business recently looked at the state of the Chicago housing market and concluded the positive signs far outweigh any potential negatives. In fact, there were four separate indicators from a recently-released study that paints a rosy picture of the housing market in Chicago.
The first positive sign: The percentage of home sales in Chicago that were not distressed reached its highest level in 3 ½ years in June. Based on information provided by Midwest Real Estate Data LLC, 78% of all sales in the Chicago area that month were of “healthy” homes. That figure has previously reached depths below 50%. Chicago still has the nation’s third-highest foreclosure rate, but a return to “normalcy” appears to be ongoing.
The second point noted by Crain’s Chicago Business is that homes in Chicago are selling faster and faster. Non-distressed homes in the Chicago area sold in an average of 71 days in June. That’s 25 days faster than a year earlier. The one caveat to this is for homes valued at more than $700,000. They remain particularly slow to sell.
The third positive sign for the Chicago housing market is that price increases have slowed down. Home appreciation was blazing early last year with some months showing price increases of 10% or more from the previous year. That is no longer the case, as one expert told Crain’s, “more rational decisions are being made.”
Finally, the number of home sales in Chicago is steadily increasing. There were 8,801 “healthy” homes sold in Chicago in June, which represents a 10% increase from the previous year.
Those are the positives, but Crain’s Chicago Business also pointed out “red flags” when it comes to the Chicago housing market. The most noteworthy is that inventory remains as tight as ever in Chicago. There were 41,358 available homes in the region at the end of June, which equates to a 3.4 month supply. Typically a six-month supply is considered indicative of a healthy market. This means seller’s are at an advantage because a tighter supply means bidding wars often erupt and prices escalate.
All in all these seem to be good times for the Chicago housing market and it’s not a bad time to get involved by either buying or selling home.