CHICAGO— Illinois home prices have now marked 21 consecutive months of year-over-year gains, and the depressed inventory that has plagued the market for months shows some sign of improving, according to data just published by the Illinois Association of REALTORS®. The data also show a decline in May home sales, at least compared to May 2013.
That decline in the number of home sales does not worry Phil Chiles, president of the state association and broker-associate with the Real Estate Group in downstate Springfield. "Last year we were playing catch–up from a down market,” he tells GlobeSt.com, and all that pent-up demand was driving the fast pace of selling. “And now, it's pretty much getting back to normal.”
In May, a total of 13,947 homes were sold, including condos, down from 15,388 in May 2013, but a 16.4% rise over April. And although the available inventory was lower than one year ago, that decline seems to be moderating. The association's data show that 67,619 units were available in May, down 7.6% compared to May 2013. And in April, only 63,406 units were available, down 10.9% compared to April 2013.
“We were very short of inventory a couple of months ago,” Chiles says. “We were just hanging on after a really tough winter, and only now is the level of inventory starting to come back, and that's a good thing for buyers and sellers.”
As usual, the statewide median prices continued to rise. In May it was $167,900, up 8.3% from May 2013 when the median price was $155,000. "In many cases sellers are finding they are getting more money for their properties, and that it is taking less time to sell them," Chiles says.
In May, homes were on the market for an average of 76 days until sale, a 7.3% decrease from last May when it took 82 days. In the nine counties that comprise the Chicago metropolitan area, it only took an average of 59 days, a 14.5% decline, and in Chicago the average fell to just 50 days.
Chicago's metropolitan area also saw a dip in sales. A total of 9,806 homes were sold, down 12.2% from the previous May. But the median price of a metropolitan area home was $207,000, up 13.1% from $183,000 in May 2013.
The decline in Chicago sales was a bit steeper. Chicago homebuyers closed on 2,390 homes, down from 2,834 in May 2013, a 15.7% decline. And city homes also saw the biggest boost in prices. The median price rose to $270,000 versus $235,000, an annual increase of 14.9%.
“The housing market continues to provide evidence of a return to more normal conditions,” says Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory of the University of Illinois. “Sales continue to increase on a month-to-month basis although they have been unable to match the stellar gains of last year. The impact of foreclosures continues to decrease with the expectation that the numbers of foreclosed properties on the market will return to pre-recession levels sometime in the next 6-12 months. Homeownership rates for retiring Baby Boomers continue to increase providing some potential medium-term housing market growth opportunities.”
"It truly is an ideal time for prospective sellers to evaluate if now is their right time to buy, and if so, to consider making their move. Buyers are being realistic about finding the home they might move into and upgrade later, and don't expect to find their dream home immediately. They are looking for location, space, and the potential a property ultimately has,” says Matt Farrell, president of the Chicago Association of REALTORS® and managing partner of Urban Real Estate.
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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.
