It will be another 2 weeks before the Illinois Association of Realtors releases February home sales for Chicago. When they do the headline increase will be around 12.5% (it may actually be as high as 17.4% but there seems to be another data discrepancy that I need to report) - not bad - and I'm sure the IAR will be really excited about that. At right around 1200 homes closed in February that is pretty close to the sales level back in the 1999/2000 time frame. At least that's better than some of the other recent months.
But the really interesting news won't be reported by the IAR because they don't report on contract activity and contract activity was up by a whopping 40% in February! As you can see in the chart below the last time we saw increases like that the silly government was paying people to buy homes - early 2010. One would think that it won't be too long before these contracts would result in closings but the backlog of open home sale contracts has grown to enormous proportions in Chicago lately.
I should also explain that the numbers behind that graph reflect 20% that I lopped off of the February contracts to account for the contracts that will ultimately not close. Similarly I have factors incorporated for January and even December. By the time you get back to November I don't think we will lose too many more of those contracts.
Implication For Housing Market
Tomorrow I will be posting on the home inventory situation in Chicago and what you will see is that with stagnant supply and record high contract activity inventories are at record low levels on a months of supply basis. This suggests that home prices could be finally bottoming as there is a real shortage of good homes out there.
Distressed Home Sales
In February the percentage of home sales in Chicago that were distressed - either short sales or foreclosures - rose again to another record high of 53%. As you can see in the graph below this is the time of year in Chicago when distressed sales comprise the highest percentage of home sales.
We maintain a collection of these and other statistics on our Chicago real estate market statistics page.