Normally as we move through August Chicago home sale activity starts to fall off much faster than the available inventory of homes. Therefore, the months of supply of homes begins a rather predictable pattern of a dramatic rise through the winter months. But this year the pattern has not materialized in the least, with August registering an amazingly paltry 4.2 month supply of homes. Compare that to last year's 13.6 months and 2010's 21.7 months. The graph below shows just how dramatic the break in this pattern is.
Now, in all fairness, the August numbers are preliminary and will certainly rise a bit as it becomes clear that up to 20% of the contract activity in the denominator of the calculation vaporizes when the underlying contracts fall apart. Nevertheless, it's clear that this August was like no other.
I know I've been sounding like a broken record on this but, for buyers, there just aren't a lot of good choices out there right now and the good stuff gets snapped up really fast. That's why we are seeing such dramatic price increases for the time being as buyers increasingly compete for the same properties.