Home prices in Chicagoland soared to a record high for the second straight month in May, while sales volume fell to a 14-year low.
The median home sale price in the nine-county metro area reached $360,000 last month, Crain’s reported, citing data from Illinois Realtors.
With the housing market often peaking in June, another record is likely to be set next month. Both April and May figures surpassed June 2023’s median price of $349,900.
Within the city of Chicago, the median home price in May stood at $362,000, marking an 8.1 percent increase year-over-year. However, that did not surpass April 2024’s median price of $370,000.
Last month represented the second-largest price gain since spring 2021, when prices were surging by 10 percent or more. After a period of flat or negative growth, home prices have been on a healthy rise since November 2023, with the most significant increase seen in April, at 8.8 percent year-over-year.
In the broader nine-county metro, home prices rose by 9.1 percent in May from a year prior. While this trend bodes well for sellers, it also highlights the erosion of affordability for buyers. In seven of the past twelve months, home prices increased by at least 9 percent compared to the previous year, with January and February experiencing gains of more than 10 percent.
However, the number of homes sold in the metro area decreased by 1.3 percent from a year earlier, a much smaller drop than the steep declines seen in 2022 and 2023, driven by spiked interest rates aimed at cooling a frenzied housing market following the pandemic.
In the city, home sales fell by 2.4 percent year-over-year in May. Although the fluctuation in sales volume has been significant in recent months, the declines are far less severe than the 20 to 40 percent drops witnessed during the prolonged market contraction of 2022 and 2023.
The number of May home sales in both the metro area and the city marked the lowest figures since 2012, excluding May 2020 when the pandemic practically froze all buying activity. Sales are falling primarily because homeowners don’t want to brave the high interest-rate environment, coupled with low inventory levels since the post-pandemic housing boom.
Chicago’s home prices are increasing faster than those in most major U.S. metro areas, the outlet reported, citing data from CoreLogic Case-Shiller Indices. In April, Chicago-area home prices rose by 8.7 percent year-over-year, the third-highest among the 20 major metros tracked by the index, trailing only San Diego and New York.
Nationwide, home prices increased by 6.3 percent in April from the previous year, with Chicago outpacing the national average for several months. That’s a notable reversal from the pre-Covid era, when Chicago’s home prices often grew at half the pace of the national average.
—Quinn Donoghue
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