With the slow season for real estate settling in after the busier spring and summer, Chicago saw a drop in year-over-year home sales and inventory this August, intensifying competition, while the broader metro area and other parts of the state notched a welcome increase in listings.
Median home prices rose throughout the state this August, with a 7 percent year-over-year jump in Chicago and a 4.4 percent increase in the broader metro area, as tight supply continues to favor sellers, new data from Illinois Realtors shows.
In the city, year-over-year home sales were down 7 percent from 2,242 in August 2023 to 2,083 deals this August, the data shows. Available inventory also decreased by 8.5 percent with just 5,048 homes for sale in the city this August compared to 5,515 homes on the market in August 2023.
The drop in sales was “reflective of Chicago’s limited inventory as sellers consider the balance of a fast selling and competitive buying market,” said Erika Villegas, Chicago Association of Realtors president and owner of RE/MAX In the Village, a real estate agency in Oak Park.
On the other hand, within the nine-county Chicago Metro Area, the data showed a 7 percent increase in the number of homes for sale this August compared to August of last year. This includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.
Home sales, though, declined year over year in the broader metro area as well, falling 6.6 percent from August 2023 (9,247 deals) to this August (8,640) in another divergence from the city itself.
The Chicagoland area is “a fragmented series of micro markets,” said Jennifer Ames, Engel & Völkers Chicago broker and president of Ames Group Chicago. “…So we’ve got a two-ends-of-the-spectrum market.”
High interest rates have created a “gridlock” of low inventory in certain submarkets as homeowners who would consider moving or downsizing under different market conditions don’t want to sign on for a mortgage with a significantly higher rate, Ames said.
Hopefully, interest rate cuts from the Federal Reserve will change this to increase inventory and home sales in gridlocked markets like the North Shore, she said. But the opposite of these trends can be seen in other parts of Chicagoland.
“In parts of the city, we’re still seeing a very soft market with a lot of inventory, especially the downtown market because people aren’t fully going back to work,” Ames said. “The demand isn’t there, and there’s other concerns like taxes and fear about crime.”
Median prices rose in the Chicagoland area and across the state as even areas that saw increases in inventory are still climbing back from “near historic lows.” The median price of a home in the nine-county Chicagoland area was $355,000 this August, up 4.4 percent from $339,900 in August 2023, according to Illinois Realtors.
Although listings continued to increase statewide this August, they remain “near historic lows and suggest that the market will continue to be highly competitive and challenging for homebuyers,” Geoff Smith, executive director of the DePaul Institute for Housing Studies, said.
The “uneven or non-existent” growth in inventory in some parts of the state is “proof that we need more policies that help consumers seize the moments when their buying power is trending upward,” Illinois Realtors President Matt Silver said in the release.
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“Our forecast estimates that the coming three months will have slightly lower levels of sales activity, but higher prices compared to 2023,” Smith said. “However, the decline in mortgage interest rates, coupled with the potential for rate cuts by the Federal Reserve, could spur additional home-buying activity.”
Chicago’s no. 4 top broker of 2023, Emily Sachs Wong of @properties, said the rate cuts have left her feeling hopeful.
“This is never our best time of year – our best time of year is always the first six months of the year,” Sachs Wong said. “But things sell all year round, and I think that on an election year, a lot of times, people sit on the sidelines. So it’s a great time for someone to actually have a pick of things on the market.”