The metropolitan Chicago housing market experienced a marked decline in September home sales activity that led to a -3% fall in total home sales during the third quarter of 2018 when compared to the same period last year, according to an analysis by RE/MAX Northern Illinois. Sales for the quarter totaled 31,454 units.
“Based on our research, the September sales slowdown, with sales off -10.9% from the year-earlier total, seems primarily to be the result of two factors,” explained Jeff LaGrange, Vice President of the RE/MAX Northern Illinois Region. “Housing costs have been rising in 2018. Mortgage rates are up nationally, and in the Chicago area we recently have seen some significant increases in property taxes. So, although the median sales price of homes in the metro area increased just 12% over the last three years, housing affordability has declined this year.
“At the same time, some potential buyers are more hesitant these days,” LaGrange continued. “RE/MAX brokers are reporting that buyers generally want homes that are move-in ready. Those homes often attract multiple offers, but homes that need considerable work can struggle to find a buyer.”
The September slowdown was especially notable among homes selling for less than $500,000, where sales dropped -13% compared to September 2017. Sales of homes priced at $500,000 or more declined just 25 units or -2.4%.
“At the higher price points, it’s more a question of how much buyers are comfortable spending,” said LaGrange. “However, for entry-level buyers, if the numbers don’t work, they’re likely to keep renting.”
Home prices continued to climb at a gentle pace. The median sales price rose +3.9% in September to $240,000, while for the third quarter it was up +2.3% to $246,500.
Sales data used by RE/MAX is collected by MRED, the regional multiple listing service. It covers detached and attached homes in the Illinois counties of Cook, DuPage, Kane, Kendall, Lake, McHenry and Will. Detached homes are typically stand-alone single-family dwellings. Attached homes include condominium and cooperative apartments along with townhouses.
Third-quarter sales activity fell in six of the seven counties, with McHenry gaining +2.5%. The largest decline was -5.9% in DuPage; the smallest was -1.2% in Kendall. Sales were down -3% in Cook and -3.8% in Chicago.
The median sales price for the quarter rose in six counties and Chicago, led by increases of +7.3% in Kendall and +5.2% in DuPage. The median was up +0.6% in Cook and +2.6% in Chicago. Lake recorded a -2.4% decline.
Average market time for the third quarter was 63 days, five days less than in 2017. All seven counties saw lower market times.
Sales of Detached Homes
Detached-home sales were relatively resilient during the third quarter in the metro area, declining -2% to 19,988 units and dropping -8.8% in September to 5,416 units. The median price rose moderately, up +3% for the quarter to $267,900, while gaining +4% in September to $260,000. Monthly median prices in the Chicago area tend to peak in June and then fall gradually.
Quarterly sales rose +4.9% in McHenry and +1.9% in Kendall but declined in the five other counties, led by a -5.8% dip in DuPage. Chicago recorded a +1.7% increase. September sales were lower in all counties and in Chicago. Cook County, which accounts for about 50% of all detached sales, had a decline of -11.2%.
Median sales prices, on the other hand, delivered quarterly gains in six counties, topped by a +7.3% increase in Kane. Lake had the only decline, dropping -5.3%. September results were generally similar except that Chicago recorded the largest increase at +7.5%.
Average market times continued to shorten. The average for the metro area was 70 days for the quarter and 72 days in September.
Sales of Attached Homes
The attached-home market, which showed significant strength earlier in 2018, slowed considerably during the third quarter, with sales falling -4.6% to 11,466 units, and the median sales price gaining just +0.7% to $203,000. Sales flagged notably in September, declining -14.4% to 3,050 units, with sales in Chicago falling -16.5%, while Cook County as a whole had a -12.3% decline.
For the quarter, only Kane had an increase in attached sales, and it was just +1.6%.
Average market times, however, remained relatively low through the quarter, with all seven counties and Chicago reporting averages of 58 days or less.
With more than 2,200 sales associates and 106 offices throughout the area, RE/MAX Northern Illinois has helped thousands of families with their home buying and selling needs.
This article provided by NewsEdge.