Home values in the Chicago real estate market continue their upward trend while selling prices and rentals are beginning to trek slightly downward. The median home values in the City have risen 3.2%, but values are up even higher, 6.4%, in the Chicago Metro area, according to Zillow.
However, the median sales price for October 2014 in Chicago was $212/sq. ft., down slightly from the previous month. Median sales prices in the Chicago Metro area for the same period were $146/sq. ft. In addition, approximately one-third of listings sold below the asking price with almost half cutting their price from the original list price. Rents throughout Chicago are also trending downwards. The average rental list price in the City was $1,631 in October compared to $1,725 for the Metro area. Although rents are coming down a bit off their peak, they are still up 30% since 2011.
The supply of residential properties is still quite high in many markets throughout the U.S. The data projection on future home sales is reassuring and it is apparent that more buyers are entering the market, many for the first time in years. Because of new housing starts around the nation, the possibility of prices spiking remains low. This is also a turning point for the market. Investors who were a major part of the housing market with all cash sales are not as prevalent as much of the foreclosure inventory has been liquidated. Also, new mortgage rules are going into effect that will make it easier for many buyers to qualify for a mortgage.
The time a home remains on the market, a key indicator of market activity, is also improving. In the Chicago Metro area, homes remained on market for an average of 109 days, thus Chicago real estate agents and brokers are selling many of their listings in less than four months.
“Sales activity in October reached its highest annual pace of the year as buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth”, said Lawrence Yun, chief economist, National Association of Realtors®. “Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases.”
The number of annual sales for single-family homes and condominiums has experienced a notable upward increase. While, there are parts of the country such as the West where sales have declined considerably, the Chicago real estate market remains strong.