CHICAGO, IL—Economists have recently seen a few worrisome signs in the state's economy, but so far, those factors do not seem to have affected the housing market. Home sales in the metropolitan Chicago area proceeded at a fast pace in May despite a continuing decline in inventory levels, according to a report from RE/MAX. Sales transactions rose 6.2% year-over-year to 12,337 units, and the median sales price climbed 6%.
At the same time, the number of homes on the market at the end of May was down 16% from the year-earlier total and represented just a 2.6-month supply based on the May sales pace. The depressed inventory has encouraged buyers to snap up homes quickly. The average time it took a seller in the region to find a buyer fell to 77 days from 87 days in May of last year.
“Demand for homes remains strong across much of the metro area,” says Jack Kreider, executive vice president and regional director of RE/MAX Northern Illinois. “Eventually, the decline in inventory levels should start to restrain sales activity, but that hasn't happened yet. Right now, it can be a challenging environment for buyers, but it's an excellent one for sellers. If you put your home on the market today at a realistic price, you can expect it to find a buyer pretty promptly.”
The numbers show a bounce back from April, when sales had declined a bit, at least when compared to the previous April. The worry was that the state's economy, already growing at a slower pace than the rest of the US, may suffer more hits as its endless budget stalemate drags on into yet another year.
Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois, told GlobeSt.com that some housing data “suggests declines and may also be reflecting the employment losses in the state over the past two months.” He added that the direction of the market would not be clear for a few more months.
But the May data certainly looks like good news. In fact, as Kreider points, the overall results suggest the metro Chicago housing market could approach its pre-Great Recession highs. May's results were nearly equal to what happened in May 2006, when sales totaled 12,409 homes at a median sales price of $250,000.
MRED, the regional multiple listing service, collected the sales data used by RE/MAX. The data set covers detached and attached homes in the Illinois counties of Cook, DuPage, Kane, Kendall, Lake, McHenry and Will.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
