Almost a week ago I posted on how a lot of people are abandoning downtown Chicago. In addition, Crain's ran a story in mid-August on how Suburban Chicago Homes Are Suddenly Selling Fast. So the obvious question is whether or not people are fleeing Chicago for the suburbs. The Crain's article has a few captivating stories of homes that sold quickly but it also acknowledges that...
Though examples of fast suburban sales are legion, the bulk data doesn’t yet show it. In the end-of-July data released Aug. 17 by CAR and MRED, most suburbs show slower or unchanged average market time compared to July 2019. But most sales that closed in July would be from contracts inked in previous months, when the crisis was in an earlier phase.
Now that we have August data I thought I'd check in to see if there was any evidence of a hot suburban market -- or at least hotter than the city of Chicago - but I'm just not seeing it. I compared the city of Chicago to Du Page and Lake counties and to make sure I was comparing apples to apples I restricted my analysis to detached homes. In my last monthly update (see the inventory section) I already explained how there is evidence that condos are out of favor so I wanted to make sure that that effect wasn't distorting the analysis.
Here is what I found:
- The months of supply of inventory is down by like 40 - 50% in all three areas. Chicago is down a bit less than the suburbs but it's a dramatic decline across the board so it definitely shows that detached homes are in high demand - but equally in all 3 areas.
- I looked at a 3 month average of market times and it's a mixed bag. Chicago is up 6%, Du Page is up 11%, and Lake County is up 24%. Not exactly a hot market.
- Median market times are also a mixed bag with no compelling story of a hot market.
- New listing activity is down pretty much across the board from 6 - 13%.
- August closed sales were up 15% in Chicago, up 43% in Du Page, and up 35% in Lake County so that would be some indication of stronger suburban demand. However...
- August contracts were up 46% in Chicago, up 65% in Du Page, and up 69% in Lake County. So you could argue that suburban demand was stronger than Chicago but it's not like Chicago is that weak.
So what do you take away form this? All it tells me is that the anecdotes make great headlines but until I see it in the data it's not a real story.
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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.