MARCH 2023 MARKET ANALYSIS FOR CHICAGO'S NORTH SIDE
Challanges
February 2023 was the twelfth consecutive month of year over year homes sales declines in Lincoln Park, Near North Side, Lakeview and North Center.
Historically low inventory levels continue to be one of the major obstacles to a real estate turn around. Last month there were only 1625 homes for sale in the four primary Northside Neighborhoods. 1036 of those homes were located on The Near North Side. This left only 589 homes for sale scattered between Lincoln Park, Lakeview and North Center.
High interest rates represent the second major obstacle to a turn around. They are keeping both buyers and sellers on the sidelines. If buyers can find a home to buy with the current low inventories, they would be looking at moving from a 3% mortgage interest rate on their current home to over 6.5% for a new home. The Fed will not reduce interest rates until they are assured that inflation is firmly under control. As a result, it appears that it may be some time before interest rates begin to fall.
Combine low inventories and high interest rates with rising taxes, crime and stock market losses and it is obvious that the real estate market on the North Side is facing some challenges.
OPPORTUNITIES
As in every market there are opportunities. Traditionally, low inventory markets can raise home prices to dangerous levels for home buyers. Chicago home prices have remained fairly stable in comparison to other parts of the country. Last month home prices dropped 11.6% against last year. There are still a lot of homes being sold and most reflect the true value and not an inflated number forced by low inventory.
Unlike the downturn in 2008, personal debt is generally low and savings are relatively strong.
In the few instances where interest rates have temporarily dropped, there has been a dramatic increase in mortgage applications.
This shows that buyers are out there and ready to buy and could result in a fast turn around once the Fed begins to relax interest rates and inventories begin to rise.
We have experienced dramatic highs and lows in North Side Real estate in the past four years, from the COVID crash of 2020 to the record breaking rebound in 2021 and back to a more normal market in 2022. The first 6 months of 2023 may continue to show decreases when compared to 2022. As a result, we will continue to compare 2023 to 2022 and 2019 (the last “normal year before COVID”) in our analysis below. There are a significant amount of homes being sold and comparing 2023 to 2022 and 2019 gives a more balanced picture of the current market.
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.
FEBRARY HOME SALES
Year To Date 2023 vs 2022 - Down 38.2 %
Month 2023 vs 2019 - Up 3.6%
Month 2023 vs 2022 - Down 34.7%
Month By Neighborhood
NEAR NORTH - Down 31.9%
LINCOLN PARK - Down 44.9%
LAKEVIEW - Down 36.3%
NORTH CENTER - Down 11.1%
Month By Price Point
Under $500,000 - Down 25.2%
$500,000 to $1,000,000 - Down 40.4%
$1,000,000 to $2,000,000 - Down 53.6%
Over $2,000,000 - Down 47.6%
FEBRUARY HOMES UNDER CONTRACT
Year To Date 2023 vs 2022- Down 35.3%
Month 2023 vs 2019 - Down 6.6%
Month 2023 vs 2022 - Down 35.8%
Month By Neighborhood
NEAR NORTH - Down 25.7%
LINCOLN PARK - Down 45.0%
LAKEVIEW - Down 42.2%
NORTH CENTER - Down 26.3%
Month By Price Point
Under $500,000 - Down 36.3%
$500,000 to $1,000,000 - Down 32.5%
$1,000,000 to $2,000,000 - Down 41.2%
Over $2,000,000 - Down 36.3%
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.
FEBRUARY HOMES FOR SALE
Year To Date 2023 vs 2022- Down 21.8%
Month 2023 vs 2019 - Down 40.6%
Month 2023 vs 2022 - Down 25.4%
Month By Neighborhood
NEAR NORTH - Down 19.3%
LINCOLN PARK - Down 32.3%
LAKEVIEW - Down 40.0%
NORTH CENTER - Down 16.0%
Month By Price Point
Under $500,000 - Down 42.9%
$500,000 to $1,000,000 - Down 11.4%
$1,000,000 to $2,000,000 - Down 7.4%
Over $2,000,000 - Down 8.8%
FEBRUARY MONTHS OF SUPPLY OF INVENTORY
Year To Date 2023 vs 2022 - No Change at 2.4 MSI
Month - Up 6.0% to 2.4 MSI
Month 2023 vs 2022 - No Change at 2.4 MSI
Month By Price Point
Under $500,000 - Down 27.3% to 1.6 MSI
$500,000 to $1,000,000 - Up 13.6% to 2.5 MSI
$1,000,000 to $2,000,000 - Up 33.3% to 4.4 MSI
Over $2,000,000 - Up 18.8% to 7.6 MSI
Month By Neighborhood
NEAR NORTH - Up 2.2% to 4.7 MSI
LINCOLN PARK - Down 5.3% at 1.8 MSI
LAKEVIEW - Down 16.7% to 1.5 MSI
NORTH CENTER - Up 14.3% to 1.6 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.
FEBRUARY MEDIAN PRICING
Year To Date 2023 vs 2022- Down 12.2%
Month 2023 vs 2019- Up 6.0%
Month 2023 vs 2022 - Down 11.6%
Month By Neighborhood
NEAR NORTH - Down 22.5%
LINCOLN PARK - Down 9.2%
LAKEVIEW - Up 4.1%
NORTH CENTER - Up 10.2%
Month By Price Point
Under $500,000 - Up 2.2%
$500,000 to $1,000,000 - Down 3.7%
$1,000,000 to $2,000,000 - Down 0.3%
Over $2,000,000 - Up 2.2%
FEBRUARY DAYS ON THE MARKET
Year To Date 2023 vs 2022- Down 8.3% to 99 Days
Year To Date 2023 vs 2019- Down 10.2% to 106 Days
Month 2023 vs 2022 - Down 2.7% to 106 Days
Month By Neighborhood
NEAR NORTH - Down 14.4% to 149 days
LINCOLN PARK - Down 11.4% to 93 days
LAKEVIEW - Down 3.4% to 84 days
NORTH CENTER - Up 31.5% to 96 Days
Month By Price Point :
Under $500,000 - Up 13.7% to 108 Days
$500,000 to $1,000,000 - Down 8.3% to 99 Days
$1,000,000 to $2,000,000 - Down 29.1% to 107 Days
Over $2,000,000 - Up 74.0% to 228 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, we would welcome the opportunity to have a conversation about your real estate needs, goals and expectations.