The Chicago real estate market just went from hitting 9 year highs to hitting a 10 year high in June. That’s certainly a positive sign. After all, if you look at the graph below, which goes back 20 years, only the 3 highest bubble years saw more home sales. However, there is a lot of month to month variation in the numbers – both historically and currently – so this may or may not be the beginning of a pattern. Nevertheless, that blue trendline in the graph below is clearly trending upwards again.
June sales were up a small but respectable amount over last year – 3.2% – but when the Illinois Association of Realtors reports the numbers in about 2 weeks they are going to report somewhere around a 0.3% increase for reasons I’ve explained before.
Chicago Home Contract Activity
The one disappointment in the numbers is that contract activity has been a bit anemic lately. My best guesstimate is that June was actually down 6.9% from last year. Taken together, the contracts written these last few months are signaling that the sales growth is definitely slowing. If you look at the graph below you’ll see a 5 year trend of increasing contract activity that has really petered out this year.
Pending Home Sales
Nevertheless, somehow we’ve managed to stockpile a nice supply of pending home sales that should conclude in the next month or two. In the graph below I look at the months “supply” of pending home sales that ended June at 1.8 vs. 1.67 last year.
Distressed Home Sales
The distressed share of home sales continues to plummet, albeit at a slower rate. After all, you can’t go below zero and we are getting pretty close to that now. June came in at the lowest level in 8 years and it was also the first time we’ve dipped below 10% – 9.8% vs. 12.4% last year. Of course we are at the time of year when this number bottoms out but compare this to the days when the seasonal bottom was above 30%.
Chicago Home Inventory
Just when you thought it couldn’t get any lower Chicago’s inventory of homes for sale continues to plumb new record lows. June ended with a paltry 3.1 month supply of condos and townhomes, down from last year’s 4.2 month supply, and a mere 4.2 month supply of detached homes, compared to last year’s 5.4 month supply. These incredibly low inventory levels can definitely be holding back our sales figures and the tight supply is finally starting to be reflected in Chicago area home prices.
Chicago Home Sale Market Times
With the tight inventory numbers we are seeing some shortening of market times in Chicago but not nearly to the degree that I would expect given stories of homes selling in days or even hours. In June condos and townhomes that sold did so in an average of 58 days vs. 62 days last year while detached homes sold in 80 days vs. 88 days last year. There must be a group of homes that are taking much longer to sell that are pulling up the average. Oh…and these market times are at 9 year lows now.