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The slowdown cometh: Home prices stall amid plummeting sales, swelling inventory
Home sales were about 10% lower last month, year over year, according to a RE/MAX report
The Chicago-area housing market’s winter doldrums stuck around through March, coming amid a nationwide slowdown that has bolstered buyers’ options but left brokers waiting for a turnaround.
Home sales across the nine-county metro area fell by almost 10 percent below the roughly 9,500 sales reported in March 2018, according to the latest RE/MAX Chicagoland Housing Report. The dip was even sharper in Chicago itself, where home sales dropped by more than 13 percent year over year.
Regional home inventory also skyrocketed last month. RE/MAX found about 4.4 months worth of supply available throughout the market, compared to 3.2 months worth one year earlier.
The report suggests that prices may finally be cooling off to match the slackened buyer pool after having marched upward for months. The median home price for the region held steady at $240,000, the same as March 2018.
Prices skidded in Chicago, pulling down the regional average while west-suburban Kane, Kendall and DuPage counties saw prices rise on average. The city’s median home sale price was $287,500 last month, compared to $301,500 in March 2018.
The local slowdown could be a sign of where the country is headed as a whole, since falling home sales often presage market-wide price drops. U.S. home sales have steadily declined during the past few months, even as prices have pushed upward.
Home sales nationwide fell by about 8.6 percent year-over last month, according to the report. But RE/MAX also found a 3.4-percent jump in the nation’s median home sale price over the same period.
During The Real Deal’s State of the Market event Tuesday, a panel of Chicago brokers said they’re already bracing for the next recession, and the inevitable drop in selling activity that comes with it.
RE/MAX Barrington owner and broker Paul Wells called the Chicago-area numbers “disappointing,” adding that the sales drop looks especially dramatic due to an “extraordinarily strong spring” last year.
“It’s been so cold and windy and crappy, it’s really suppressed our spring this year,” Wells said. But he was optimistic about the future. “I really believe it’s going to go up dramatically in the next two months, especially since the low and middle of the market is getting crazy hot.”
Wells also blamed the 2017 federal tax overhaul and its cuts to the mortgage interest deduction for forcing buyers to rethink the cost of homeownership. He added that buyers would be wise to make their move while interest rates are historically low.
“When you tell your grandkids that you bought a house at a 4-percent rate,” he said, “they’re going to think you were making stuff up.”