Week 8: Covid-19 Still Screwing Up The Chicago Real Estate Market

Week 8: Covid-19 Still Screwing Up The Chicago Real Estate Market
After 8 weeks the coronavirus is still wreaking
havoc on the Chicago real estate market

I hope to post my monthly update tomorrow but I think it's still worth continuing to look at the weekly data for a while longer to see how fast the Chicago real estate market is changing in response to the Covid-19 pandemic. It certainly fell off a cliff fast when all hell broke loose in mid-March so it's always possible that things could improve pretty quickly.

As I mentioned last week the comparison to last year is a little tricky because Easter fell in two different weeks for the two years. As we compare the week ending April 25, which was just a regular week in 2020, we need to keep in mind that the corresponding week in 2019 was the week after Easter, which could have had an abnormally high level of activity. Here is how this year compares to last year:

Detached Homes

  • New listings were down 47% from last year to 267 homes
  • Contract activity was down 35% to 191
  • Inventory in absolute terms was down 15% to 2754 homes
  • However, in relative terms inventory was actually up from 11.0 weeks of supply to 14.4 weeks

Attached Homes

  • New listings were down 60% to 406 homes
  • Contract activity was down 46% to 235
  • Inventory in absolute terms was down 10% to 4959 homes
  • Inventory in relative terms was up from 12.8 weeks of supply to 21.1 weeks - a lot lower than last week

New listings continue to look like a problem area that has gotten worse since last week while contract activity may have improved a bit. If home buyers prefer "fresh" inventory this could be perceived as an inventory shortage despite the fact that overall relative inventory is extremely high right now. There are anecdotes floating around of bidding wars and quick sales but I'm not seeing that in the market time data. I would expect that if there was an inventory shortage we would see dramatically lower market times as people scooped up the fresh inventory. However, given that it takes 1 - 2 months for a deal to close it's possible that the new market reality has not yet flown through to the data.

The fact that condo activity is off by more than single family home activity continues to make me wonder if people are becoming leery of living in close proximity to other potentially infected people. It's really too soon to tell.

Are The iBuyers Coming Back Already?

Early on in the Coronavirus saga I posted about how all the iBuyers were retrenching out of fear of being left holding the bag on a bunch of homes that wouldn't sell. In particular, Opendoor laid off 1/3 of its staff in March and halted all operations. However, they are already resuming operations in Phoenix and planning to resume in 20 other markets in the next few months. Unlike some of the other players in this space - e.g. Zillow - iBuying is their entire business so they can't really afford to sit on the sidelines forever. It will be interesting to see how they navigate the current tricky environment.

#RealEstate #ChicagoRealEstate #Coronavirus

Gary Lucido is the President of Lucid Realty, the Chicago area's full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider's view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.

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