SEPTEMBER 2023 MARKET ANALYSIS FOR CHICAGO'S NORTH SIDE
In the past two months, the North Side Real estate market has shown some signs of improvement: however, it seems as though everytime we get a push forward we also get another push back. Here are 3 push forwards and 3 push backs that are currently affecting the market.
THE PUSH FORWARD
1 - Home Sales - While August 2023 was the 18th consecutive month of year-over-year home sales declines in Lincoln Park, Near North Side, Lakeview and North Center, the decline percentages moved into single digits for August. The 6.7 decilne in home sales is the lowest that we have seen since April of 2022 and is a vast improvement over the 30 and 40 percent decreases that we were experiencing at the begining of 2023.
2 - HOME PRICES - August represented the fifth consecutive month of median home price increases. Traditionally, low inventory markets can inflate home prices to dangerous levels for home buyers. Despite many multiple offers and low market times, Chicago home prices have remained fairly stable in comparison to the suburbs and other parts of the country. August home prices rose 3.2% over last year and prices are now 0.6% ahead of Year To Date 2022 median prices.
3 - MSI - Months Of Supply Of Inventory is a calculation that compares home sales to inventory levels. Traditionally, anything below 6.0 MSI is considered a seller’s market and anything above is considered a buyer’s market. 2023 MSI levels have dropped as low as 1.2 MSI in the past months reflecting the critical shortage of homes for sale. MSI levels are slowly starting to rise and have moved from 2.0 in Lakeview to 6.0 on the Near North Side. The overall MSI of 3.3 is still heavily weghted to sellers because of the critical lack of inventory, but is slowly moving toward a more neutral market.
THE PUSH BACK
1 - Interest rates - After the shock of interest rates doubling over the past year, many buyers were beginning to settle into the reality of 6%. This was just in time for the Fed to raise rates well into the 7% range, sending some buyers into “rate PTSD.” It appears that we can expect more rate increases in the future in the battle against inflation. While it is good for inflation it cuts buying power for buyers and keeps sellers from putting their homes on the market, as they will giving up low interest rates for significanlty higher ones when they buy their new home (if they can find one).
2 - Transfer Tax - The new tranfer tax actually lowers the tax on homes priced under $1,000,000, but significantly raises the tax on homes priced from $1,000,000 to $2,000,000. The tax on homes priced over $2,000,000 has quadrupled. While this increase alone should not do significant damage to the market by itself, but it just increases the financial burden on home owners and sellers. Hopefully, the Mayor will keep his campaign promise of no increase in property taxes.
3 - Crime - While the city continues to report decreases in violent crime, the perception of crime by many people is quite different. As a result, some sellers are opting for the suburbs rather than upsizing or downsizing in the city. Buyers are taking a hard look at the safety factor and are also considering the suburbs.
SUMMARY
Most major cities have gone through and rebounded from the same problems that Chicago is facing. Many cities such as New York and Los Angeles are currently having similar problems. From a real estate standpoint lack of inventory continues to be our major problem. The buyer pool appears to be strong and ready to buy. Hopefully, the “push forwards” above will over power the “push backs.”
Please review the analysis below for your neighborhood and price point to see 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.
AUGUST HOME SALES
Year To Date 2023 vs 2022 - Down 28.8%
Month 2023 vs 2022 - Down 6.7%
Month By Neighborhood
NEAR NORTH - Up 3.5%
LINCOLN PARK - Down 21.4%
LAKEVIEW - Down 11.6%
NORTH CENTER - Up 5.7%
Month By Price Point
Under $500,000 - Down 10.7%
$500,000 to $1,000,000 - Down 0.5%
$1,000,000 to $2,000,000 - Down 6.5%
Over $2,000,000 - Down 3.4%
AUGUST HOMES UNDER CONTRACT
Year To Date 2023 vs 2022- Down 24.6%
Month 2023 vs 2022 - Down 7.0%
Month By Neighborhood
NEAR NORTH - Up 1.0%
LINCOLN PARK - Down 19.1%
LAKEVIEW - Down 2.7%
NORTH CENTER - Down 27.1%
Month By Price Point
Under $500,000 - Down 19.2%
$500,000 to $1,000,000 - Down 13.7%
$1,000,000 to $2,000,000 - Down 12.1%
Over $2,000,000 - Down 16.6%
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.
AUGUST HOMES FOR SALE
Year To Date 2023 vs 2022- Down 21.6%
Month 2023 vs 2022 - Down 21.9%
Month By Neighborhood
NEAR NORTH - Down 14.7%
LINCOLN PARK - Down 28.9%
LAKEVIEW - Down 35.7%
NORTH CENTER - Down 28.9%
Month By Price Point
Under $500,000 - Down 33.3%
$500,000 to $1,000,000 - Down 21.0%
$1,000,000 to $2,000,000 - Down 9.8%
Over $2,000,000 - Up 1.7%
AUGUST MONTHS OF SUPPLY OF INVENTORY
Year To Date 2023 vs 2022 - Up 0.3% at 3.0 MSI
Month 2023 vs 2022 - Up 3.0% at 3.3 MSI
Month By Price Point
Under $500,000 - Down 11.1% to 2.4 MSI
$500,000 to $1,000,000 - Up 10.0% to 3.3 MSI
$1,000,000 to $2,000,000 - Up 25.0 to 5.5 MSI
Over $2,000,000 - Up 28.0% to 10.5 MSI
Month By Neighborhood
NEAR NORTH - Up 7.1% to 6.0 MSI
LINCOLN PARK - Up 8.3% to 2.6 MSI
LAKEVIEW - Down 4.8% to 2.0% MSI
NORTH CENTER - Down 3.8 to 2.5 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.
AUGUST MEDIAN PRICING
Year To Date 2023 vs 2022- Up 0.6%
Month 2023 vs 2022 - Up 3.2%
Month By Neighborhood
NEAR NORTH - Up 1.2%
LINCOLN PARK - Up 9.6%
LAKEVIEW - Up 21.5%
NORTH CENTER - Down 10.1%
Month By Price Point
Under $500,000 - Up 0.4%
$500,000 to $1,000,000 - Up 1.3 %
$1,000,000 to $2,000,000 - Down 0.1%
Over $2,000,000 - Down 13.3%
AUGUST DAYS ON THE MARKET
Year To Date 2023 vs 2022- Up 4.4% to 71 Days
Month 2023 vs 2022 - Up 3.0% to 68 Days
Month By Neighborhood
NEAR NORTH - Down 3.4% to 85 days
LINCOLN PARK - Up 2.0% to 46 days
LAKEVIEW - Down 2.5% to 39 days
NORTH CENTER - Down 11.7% to 31 Days
Month By Price Point :
Under $500,000 - Down 10.4% to 43 Days
$500,000 to $1,000,000 Down 7.4% to 50 Days
$1,000,000 to $2,000,000 - Up 6.0% to 71 Days
Over $2,000,000 - No Change at 101 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.