Asking prices reach new heights, despite cooling market

Asking prices for Chicago-area homes are topping previous records, even as deal volume within the city’s housing market has cooled off considerably since last summer.

The median asking price was a little more than $333,500 as of late March, which is a 1.1 percent increase from the same time last year and 2.4 percent jump from the previous record of $332,700 in May, Crain’s reported, citing statistics provided by Redfin.

Local real estate agent Lisa Blume was convinced to list her Lakewood-Balmoral home at $1.1 million and put it on the market last week. Six days later, it sold, to her astonishment.

“Optimism about pricing? Yes, I’m feeling it,” Blume told the outlet. “It’s kind of amazing to me.”

However, the sky-high asking prices across Chicago isn’t necessarily indicative of a thriving market. Rising interest rates and inflation caused the city’s two-year long housing boom to peak about halfway through 2022.

Things have changed considerably then. Earlier this year, it was reported that new home sales in the fourth quarter of last year plummeted to depths not seen since the Great Recession, with just 677 homes being sold.

One of the reasons why initial listing prices have continued to ascend is the low level of inventory. By the end of February, about 5,160 homes were on the market, down 17 percent from 6,220 homes one year prior, the outlet reported. 

Homeowners who were considering selling have opted not to in many cases because they don’t want to ditch their lower mortgage rates and go house hunting while interest rates climb. Plus, there’s simply not as much left to sell after the market boom.

The stability of Chicago’s housing market is another reason why asking prices remain high, as it caused many prospective sellers to adopt a “wait-and-see” mentality. Whereas other markets are more volatile, the median price of homes sold has remained flat in the Windy City while dipping in other large cities.

— Quinn Donoghue