In September, home sales in McHenry County rose 2.5% over September 2017. It was the only county in the metro area to see an increase.
CHICAGO—The metropolitan area saw a significant decline in September home sales, but whether this is part of a longer-term trend is not clear. Sales fell 10.9% compared to last September, and that slowdown led to a 3% fall in total home sales during the third quarter of 2018 when compared to the same period last year, according to an analysis by RE/MAX Northern Illinois. Sales for the quarter totaled 31,454 units.
“Housing costs have been rising,” says Jeff LaGrange, vice president of the RE/MAX Northern Illinois Region. “Mortgage rates are up nationally, and in the Chicago area we recently have seen some significant increases in property taxes. So, although the median sales price of homes in the metro area increased just 12% over the last three years, housing affordability has declined this year.”
“At the same time, some potential buyers are more hesitant these days,” LaGrange adds. “RE/MAX brokers are reporting that buyers generally want homes that are move-in ready. Those homes often attract multiple offers, but homes that need considerable work can struggle to find a buyer.”
The September slowdown was especially notable among homes selling for less than $500,000, where sales dropped 13% compared to September 2017. Sales of homes priced at $500,000 or more declined just 2.4%. “At the higher price points, it's more a question of how much buyers are comfortable spending,” says LaGrange. “However, for entry-level buyers, if the numbers don't work, they're likely to keep renting.”
Home prices continued to climb at a gentle pace. The median sales price rose 3.9% in September to $240,000, while for the third quarter it was up 2.3% to $246,500.
“September's sales were lower, but it is difficult to extract any trend from one month's data and it will require more monitoring in the months ahead to determine longer-term market impacts,” says Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois.
MRED, the regional multiple listing service, collected the sales data used by RE/MAX.
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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.
