CHICAGO—The state's housing market ended the year in positive territory, but a lack of inventory continues to dampen sales, according to data released by Illinois REALTORS®. The number of statewide sales declined a bit for December, but median prices continued what has been a 64-month long overall gain in prices.
Statewide home sales in December totaled 11,488 homes sold, down 2.7% from 11,803 in December 2016. Year-end 2017 home sales totaled 164,528, up 1.2% from 162,636 in 2016.
The statewide median price in December was $185,000, up 6.3% from December 2016 when the median price was $174,000. The year-end 2017 median price reached $195,000, up 6.0% from $184,000 in 2016.
“The Illinois housing market posted a solid performance in 2017,” says Matt Difanis, president of Illinois REALTORS® and broker-owner of RE/MAX Realty Associates in Champaign. “We finished the year with sales and median prices in positive territory, and we likely would have had an even stronger sales year in many markets if available inventory was able to keep pace with demand.”
The time it took to sell a home in December averaged 60 days, down from 67 days a year ago. Two years ago, homes stayed on the market for an average of 79 days. Available housing inventory totaled 45,825 homes for sale, a 12.3% decline from December 2016 when there were 52,253 homes on the market.
In the nine-county Chicago metro area, home sales in December 2017 totaled 8,067 homes sold, down 2.1% from December 2016 sales of 8,244 homes. Year-end 2017 home sales totaled 118,131, up 1.2% from 116,686 homes sold in the region in 2016.
The median price in December 2017 was $225,000 in the Chicago metro area, an increase of 5.1% from $214,000 in December 2016. The year-end 2017 median price reached $235,000, up 5.6% from $222,500 in 2016.
“The forecasts for prices and sales for the first quarter of 2018 remain positive,” says Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois. “After adjusting for inflation, prices are now seven percent higher than pre-recession levels statewide and nine percent higher in the Chicago PMSA.”
The recent tax reform package passed by Congress could change the housing landscape in the coming year, he adds. “A major uncertainty in 2018 is the net impact limitations on state and local tax deductibility and the mortgage interest will have on one hand, with the reduction in tax rates that should increase consumer disposable income on the other.”
The city of Chicago saw a 1.7% year-over-year home sales increase in December 2017 with 2,008 sales, up from 1,974 in December 2016. Year-end home sales totaled 28,621, a 1.8% increase compared to 28,104 in 2016.
The median price of a home in the city of Chicago in December 2017 was $267,500, up 2.9% compared to December 2016 when it was $260,000. The year-end 2017 median price reached $285,000, up 4.8% from $272,000 in 2016.
“Overall, we saw an active and healthy market in 2017, and are positioned well for the forthcoming spring market,” says Rebecca Thomson, president of the Chicago Association of REALTORS® and vice president of agent development at @properties. “Buyers should expect to see expanded options on the market in the months ahead, but competition will also remain strong as demand outpaces supply and rates remain low.”
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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.
