24-Feb-19 – The median price of an existing home in Chicago in January was $252,000, down 4.9 percent from $265,000 in January 2018, reported a new survey by Illinois Realtors. Chicago also saw year-over-year home sales decrease 19.4 percent with 1,164 units changing hands in January, compared with 1,444 units one year earlier.

While home prices slipped in Chicago, so did mortgage rates. On February 21, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home loans averaged 4.35 percent, down from 4.37 percent a week earlier. A year ago, the 30-year fixed loan average was 4.40 percent.

“Mortgage rates fell for the third consecutive week, continuing the general downward trend that began late last year,” said Sam Khater (left), Freddie Mac’s chief economist.

Chicago-area lenders were charging a range of 4.256 to 4.444 percent on 30-year fixed-rate mortgages on February 21, reported RateSeeker.

Consumer confidence throughout the United States declined in December and January due to the government shutdown, slowing rate of job growth, and overall uncertainty about the direction of the economy, according to Tommy Choi, president of Chicago Association of Realtors.

“This resulted in declines in closed home sales for January,” said Choi (right). “Sellers responded by lowering prices slightly to incentivize cautious buyers, who are regaining some power. The slower market is not a cause for concern, as market changes are a natural part of the real estate cycle.”

In the nine-county Chicago metro area in January, single-family home and condominium sales totaled 4,526 units, down 22.9 percent from 5,867 units in January 2018. The median price in January was $224,000 in the Chicago metro area, a slight increase of 0.4 percent from $223,000 in January 2018.

“The year-over-year decline in sales continued in both Illinois and Chicago, but this decline was matched by a small drop in prices,” said Geoffrey J.D. Hewings (left), an economist at the University of Illinois.

“This slippage in both sales and prices may signal the impact of declining consumer confidence and the effects of the government shutdown. Research indicates this could set the state up for additional price decreases in February and March,” Hewings said.

Statewide, single-family home and condo sales in January totaled 6,761 units, down 19.4 percent from 8,385 units in January 2018.

Realtors expect inventory shortage to get better

After years of gains, the statewide median price slipped 0.3 percent to $182,000 in January, down from $182,500 in January 2018. The median is a typical market price where half the homes sold for more and half sold for less.

“Buyers may finally be beginning to gain some advantage as we enter the run-up to the spring market,” said Ed Neaves (right), president-elect of Illinois Realtors. “As inventory declines level off, buyers are likely to find more options to choose from, easing what has been a chronic market challenge in the past few years.”

The time it took to sell a home in Illinois in January averaged 62 days, down from 64 days a year ago. Available inventory totaled 47,470 homes and condos for sale, a one percent decline from 47,949 units in January 2018.

Sales and price information for the survey was generated by Multiple Listing Service closed sales reported by 27 participating Illinois Realtor local boards and associations including Midwest Real Estate Data LLC.