Resisting the temptation to declare the start of a Chicago housing market rebound

The March sales numbers from the Illinois Association of Realtors were good for Chicago. Not only did the number of condo and single-family home sales in the city rise during the month, so did the median price of these sales.

That last point is important. For months, city of Chicago home sales have been rising, but prices have been dropping at the same time. That doesn't do much good for home sellers. It's nice that homes are moving, but sellers can't be happy to sell their homes at continually falling prices.

According to the Realtors association, the median sales price of Chicago condos and single-family homes hit $171,750 in March. That’s up 5.2 percent from the same month one year earlier.

But let's hope members of the media don't get too excited. The March numbers are nice ones, yes, but they certainly don't mean that Chicago's housing recovery is picking up speed. First, March tends to be a strong selling month anyway. Even more importantly, though, there are plenty of housing foreclosures ready to hit the market in the city as banks continue to work through their backlogs. This will certainly have a negative impact on housing values as buyers choose to spend $200,000 on a foreclosed property instead of $250,000 on a similar home two blocks away that isn't distressed.

So, yes, be happy that we finally saw a month in which median housing sales prices finally rose in Chicago. Just don't take it as rock-solid evidence that housing prices will continue to rise as spring heads toward summer.

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  • Let us hope it is not a dead cat bounce.

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