JANUARY 2023 MARKET ANALYSIS FOR CHICAGO'S NORTH SIDE
2022 ended with the tenth consecutive month of home sales decreases compared to 2021 in Lincoln Park, Near North Side, Lakeview and North Center.
We have heard just about every spin possible on this market in an effort to find some positive (and there is some positive). The reality is that this has been a difficult year for Chicago real estate with 2022 home sales dropping 15.1% vs 2021.
It is too early to know if the economy is going to make a “soft landing” or go into a hard recession in 2023. While there are a lot of predictions, there are just too many unknowns for anyone to really know what is going to happen or when.
Here is what we do know and how it may affect the 2023 market.
1 - Rising interest rates and historically low inventory levels are the primary reasons that many buyers and sellers are staying on the sidelines, waiting for some stability. Rising taxes, crime rates and stock market woes are all having a negative impact on the market. Home sales performance will continue to be tied to inventory levels in 2023.
2 – 2021 was a record rebound year from COVID in real estate and the dramatic decreases that we have experienced in 2022 are a result. We have also been comparing 2022 to 2019 which was the last “normal year” before COVID. 2022 home sales increased 18.1% vs 2019 and show that despite the 2020 decreases vs 2021, there are still a significant number of homes being sold. See our analysis below.
3 – Decreasing market times and high open house attendance signals that there is pent up buyer demand. A significant increase in inventory could make for an active 2023; however, a continued inventory shortage would produce results similar to 2022.
4 – Despite national reports of dramatically rising home prices, the Chicago market has remained relatively stable given the low inventory levels. Sellers need to be sure that they are priced competitively for their neighborhoods and property types. If a property hasn’t sold in this market it is probably due to overpricing.
Please review the analysis below for your neighborhood and price point to see for yourself how they are performing. Each section below has a button that provides additional monthly, year to date and 10 year trends. Chicago is a big complicated city and so is the real estate market. There is no “one size fits all.” Buyers and sellers should look at market statistics for their individual neighborhood, property type and price point to get accurate data.
DECEMBER HOME SALES
Year To Date 2022 vs 2021 - Down 15.1 %
Year To Date 2022 vs 2019 - Up 18.1%
Month 2022 vs 2021 - Down 47.0%
Month By Neighborhood
NEAR NORTH - Down 46.3%
LINCOLN PARK - Down 42.1%
LAKEVIEW - Down 48.2%
NORTH CENTER - Down 56.5%
Month By Price Point
Under $500,000 - Down 41.7%
$500,000 to $1,000,000 - Down 51.6%
$1,000,000 to $2,000,000 - Down 52.6%
Over $2,000,000 - Down 51.7%
DECEMBER HOMES UNDER CONTRACT
Year To Date 2022 vs 2021- Down 18.9%
Year To Date 2022 vs 2019 - Up 13.2%
Month 2022 vs 2021 - Down 39.4%
Month By Neighborhood
NEAR NORTH - Down 31.4%
LINCOLN PARK - Down 53.1%
LAKEVIEW - Down 43.5%
NORTH CENTER - Down 32.3%
Month By Price Point
Under $500,000 - Down 35.2%
$500,000 to $1,000,000 - Down 37.9%
$1,000,000 to $2,000,000 - Down 50.0%
Over $2,000,000 - Down 60.7%
Noteworthy : Most home sales that closed this month went under contract in a previous month. Units Under Contract reflects a more accurate picture of the current month, although not every home that goes under contract closes.
DECEMBER HOMES FOR SALE
Year To Date 2022 vs 2021- Down 29.3%
Year To Date 2022 vs 2019 - Down 26.6%
Month 2022 vs 2021 - Down 20.2%
Month By Neighborhood
NEAR NORTH - Down 15.6%
LINCOLN PARK - Down 28.9%
LAKEVIEW - Down 34.5%
NORTH CENTER - Up 24.4%
Month By Price Point
Under $500,000 - Down 34.9%
$500,000 to $1,000,000 - Down 9.2%
$1,000,000 to $2,000,000 - Down 7.9%
Over $2,000,000 - Up 0.1%
DECEMBER MONTHS OF SUPPLY OF INVENTORY
Year To Date 2022 vs 2021 - Down 32.5% to 2.9 MSI
Year To Date 2022 vs 2019 - Down 44.2% to 2.9 MSI
Month 2022 vs 2021 - No Change at 2.3 MSI
Month By Price Point
Under $500,000 - Down 34.9% to 1.8 MSI
$500,000 to $1,000,000 - Up 15.8% to 2.2 MSI
$1,000,000 to $2,000,000 - Up 18.8% to 3.8 MSI
Over $2,000,000 - Down 10.0% to 1.8 MSI
Month By Neighborhood
NEAR NORTH - Down 2.3% to 4.2 MSI
LINCOLN PARK - Down 11.1% to 1.6 MSI
LAKEVIEW - Down 16.7% to 1.5 MSI
NORTH CENTER - Up 66.7% to 2.0 MSI
Noteworthy - Traditionally, MSI over 7.0 designates a buyer’s market and under 6.0 a seller’s market. Between 6.0 & 7.0 is considered a neutral market.
DECEMBER MEDIAN PRICING
Year To Date 2022 vs 2021- Up 3.1%
Year To Date 2022 vs 2019- Up 9.4%
Month 2022 vs 2021 - Down 7.6%
Month By Neighborhood
NEAR NORTH - Down 5.9%
LINCOLN PARK - Down 9.7%
LAKEVIEW - Down 6.8%
NORTH CENTER - Down 9.2%
Month By Price Point
Under $500,000 - Down 22.0%
$500,000 to $1,000,000 - Up 0.4%
$1,000,000 to $2,000,000 - Up 4.6%
Over $2,000,000 - Down 3.5%
DECEMBER DAYS ON THE MARKET
Year To Date 2022 vs 2021- Down 23.8% to 67 Days
Year To Date 2022 vs 2019- Down 27.2% to 67 Days
Month 2022 vs 2021 - Down 16.8% to 84 Days
Month By Neighborhood
NEAR NORTH - Down 24.1% to 126 days
LINCOLN PARK - Down 11.5% to 85 days
LAKEVIEW - Down 34.7% to 47 days
NORTH CENTER - Up 16.2% to 79 Days
Month By Price Point :
Under $500,000 - Down 0.1% to 85 Days
$500,000 to $1,000,000 - Down 12.1% to 87 Days
$1,000,000 to $2,000,000 - Down 8.0% to 103 Days
Over $2,000,000 - Down 40.1% to 95 Days
YOUR HOME
A logical question would be “how does all of this affect the home that I am planning to sell or potentially buy?”
Every home is unique and a detailed analysis of your property and neighborhood is a necessity to fully understand the true market value and whether this is the right time to buy or sell.
There are many criteria both objective and subjective that must be analyzed in order to get a true picture.
Internet home pricing sites that claim to calculate your home’s value using only algorithms can be wildly inaccurate. Many market analysis from real estate agents that have not taken the time to personally tour the home can also be seriously flawed. Today’s volatility demands that you get a broker who thoroughly understands this rapidly changing market.
Whether you are buying or selling a home, I would welcome the opportunity to have a conversation about your real estate needs, goals and expectations.