Summer Housing Market Update

The primary season for real estate sales typically reaches a peak at the end of Spring, flowing into the start of Summer. However, Chicago’s real estate market was delayed due to COVID-19 so we’re seeing market numbers that reflect closer to that of Spring. Currently, buyer demand is high, inventory is low and sellers have the upper hand. Here’s a deeper look into Chicago’s summer housing market and what it means for buyers and sellers. 

New Listings Are Up

New listings are up going up each month. From April to May there was a rise of 42% in new listings and rose 20% from May to June. Although June was down 9.2% YOY from June ’19, the summer real estate market is catching up to typical spring levels. The number of new listings in June ’20 are slightly ahead of the numbers from March ’19. As the city begins to reopen, the real estate market is responding accordingly, showing similar numbers to a Spring market.

 

Home Prices Remain Steady

Home sale prices in the Chicagoland area are performing 2.5% better YOY from June ’19. Prices have remained steady from April-June ’20, coming in at a median price of $250K.

The big surprise of the housing market is that prices have remained quite resilient,” says realtor.com Senior Economist George Ratiu. He doesn’t expect prices to drop over the next few months. “The summer housing market will be better than expected, but far off the normal pace.” 

Additionally, home prices have risen slightly from Januarys prices of $248K. The marginal increase shows that its still a seller’s market. Buyers are up against a lot of competition with low inventory, giving sellers the opportunity to raise prices with zero pressure.

 

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Listings Under Contract Spike

Listings under contract surged for the second month in a row during Chicago’s 2020 summer housing market. From April to May we saw a 44%  jump and a 28% increase from May to June. Listings under contract are also performing 32.4% better YOY from June ’19 in the Chicagoland area. This means that despite the low inventory, buyers are finding a home they like and acting on it.

As reflected in The Fannie Mae Home Purchase Sentiment Index (HPSI), buyer confidence is improving for the summer. This improvement can be attributed to the low mortgage rates – which are below 3% – and steadying unemployment rates. This upward trend in confidence reflects rapidly stabilizing market conditions and shows a boost in home purchases comparable to Spring 2019 levels.
 

 

Closed Sales Made a Comeback

Going hand in hand with listings under contract, the summer housing market has seen a come back in closed sales. June recovered quickly from May’s 10% decrease in sales, coming in with 10,041 sales- an improvement of 25%.  While this number is 18% lower YOY, June ’20 closings are higher than March of 2019 which only had 8,257 closed sales.

With low inventory and more homes selling, buyers seeking an affordably priced home this summer should expect multiple officers and bidding wars, which drive prices up even further, instead of deals. This means for anyone ready to sell their home now is the time to do it. 

 

Best Practices During COVID 

• Realtors should work with clients to reduce face to face interaction, which may mean providing virtual tours,
  interactive links, virtual floorplans, and photos, to review while video conferencing.
• Realtors should practice social distancing — and they should ask clients to do the same!
• Clients should wear a mask when social distancing isn’t possible and indoors. That may include while working together!
• Realtors should have a discussion about having strangers in the home, ways to help mitigate possible risks, and the best course of action for selling and marketing a home.