We just updated our periodic analysis of Chicago home inventory and market times and once again Chicago hit record lows - especially for this time of the year. It's great news for home sellers but what's good for sellers isn't very good for home buyers, as anyone who is looking right now can tell you.
Check out the graph below for 2 - 3 bedroom condo inventory in the city through December and you'll see that inventories - measured on a months of supply basis - were phenomenally low. December hit approximately 4.5 months compared to previous Decembers that ranged from 14 - 34 months. Do you see how absolutely incredible this is when you consider where we've been over the last few years? It's the result of a double whammy from way fewer homes being listed for sale combined with way higher contract activity.
And the impact of this lower home inventory is reflected in the remarkably low market times shown in the graph below. Now, don't get too worked up over the dramatic drop that occurred a few months back. That was the result of hundreds of long-in-the-tooth condos being taken off the market in the south loop. If you want to make a comparison you can look at early 2008. Suffice it to say that 150 days for condos that are currently for sale is pretty darn good.
So you would think that home prices in Chicago would be skyrocketing and all homes are selling really quickly, right? Not so much. On the one hand desirable homes that are priced well move fast - really fast - often in the first week with multiple offers. But on the other hand homes that have any challenges whatsoever - e.g. little natural light, close to train tracks, needing repairs, ect... - continue to languish without price cuts. What gives? The only thing I can figure out is that today's home buyers are much more discriminating than they were at the peak of the bubble. And remarkably you still have the bottom feeders running around throwing lowball offers out like it's 2011 still.
The other day I mentioned how weird the market is to another realtor who has been in the business for 35 years. Her response: "It's always weird". Brutal honesty from someone who ought to know.
Logan Square and East Village Flagged As Neighborhoods To Watch In 2013
In related news Redfin recently analyzed 16 metro areas and came up with their list of the hottest emerging neighborhoods based upon number of homes for sale, sales volume, home prices, and sales to list price ratios. I don't buy into all those metrics - e.g. sales to list price ratio - but, interestingly, Logan Square made the top 10 list. Even moreso than the rest of Chicago Logan Square has seen a dramatic improvement in their home inventory.
And East Village also made the top 3 list for Chicago neighborhoods. As I've written about before there has been an incredible run up in average home selling prices in East Village over the last couple of years. Why do you think I bought there?