The Real Deal Chicago

Shrinking Illinois home inventory pushing prices up, sales numbers down: report

About 10 percent fewer homes were sold across the state last month year over year, and prices are on the rise
By Alex Nitkin | October 19, 2018 11:35AM

(Credit: iStock)

A 16.6 percent decline in Chicago home sales drove a statewide nosedive in transactions since last year, even as the median sale price climbed in nearly every part of the state.

Brokers take the diverging numbers as a sign that homebuilders aren’t keeping pace with buyers, especially since houses across the state are spending less time on the market than in 2017, according to a Friday report from the Illinois Association of Realtors.

The association counted 12,432 houses and condos sold in the state last month, down more than 10 percent from the 13,873 sold last September. The median sale price for Illinois homes notched up from $192,000 to $198,000 over the same period.

Chicago Association of Realtors president Tommy Choi, a broker with Keller Williams, said in a statement the numbers are a sign that “inventory continues to fall, and people may be priced out of the few price bands where there is inventory.”

The report tallied 60,771 total homes on the market in Illinois last month, down 3.5 percent from last year.

Pricier mortgages may also be keeping potential buyers out of the market. The monthly average interest rate for a 30-year fixed-rate mortgage jumped to 4.63 percent in September, up from 3.81 percent one year earlier, the report showed.

The combination of higher rates and tightening availability of homes is “making it much tougher for some buyers to make a move, even though the data suggests many very much do want to make a purchase,” according to Ed Neaves, the Bloomington-based president-elect of the Illinois Association of Realtors.

The trend is especially stark across the nine-county Chicago metro area, where the 8,587 homes sold last month represent a 12.1 percent drop year over year. The median sale price in the region jumped by nearly 4 percent at the same time, from $230,000 to $239,000.

About half of Illinois’ 102 counties showed growth in median home prices, according to the report, which compiles Multiple Listing Service data reported by more than two dozen broker groups around the state.

The median price in west-suburban DuPage County shot up by 6.3 percent to hit $281,750, and Madison County in the St. Louis suburbs saw a spike of more than 25 percent, hitting $151,500.

Even with the rising prices, Chicago is the second-most affordable big city to buy a house in right now in the United States, and it’s expected to remain buyer-friendly for the next few years, according to a report.

Luxury home sales, meanwhile, are having a banner year: The number of houses and condos sold for at least $4 million in metro Chicago has already surpassed the total sold in all of 2016 or all of 2017.