30-Jan-21 – The antidote to the virus across Chicago’s North Side residential real estate market in late 2020 was record low mortgage rates and buyers seeking more space.

“As the COVID-19 pandemic rolled on, North Side home sales in the fourth quarter of last year reached their highest level since 2007, with 2,219 properties changing hands,” noted broker Mary Jo Nathan (left) of the Charese Team at Compass, 2044 West Roscoe Street in Roscoe Village.

According to the Compass quarterly Chicago North Side Market Report, combined sales of detached and attached homes on the North Side were 21 percent higher than during the comparable period a year earlier, and the median sales price for homes gained 8.7 percent to $395,000.

The Compass report tracks home sales in nine neighborhoods – Edgewater, Lake View, Lincoln Park, Lincoln Square, Near North Side, North Center, Rogers Park, Uptown, and West Ridge.

For the seven-county Chicago metro area, the comparable results for the quarter were a 35.4 percent increase in sales activity and a 12.5 percent rise in the median sales price.

The slower sales pace on the North Side when compared to the entire metro area can largely be traced to slower sales in the high-rise heavy Near North Side, the Compass report said. When that area is excluded, North Side sales were up 31.1 percent for the quarter.

Lowest mortgage rates in 50 years and homes are selling fast

On January 28, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home loans averaged 2.73 percent nationwide, down from 2.77 percent a week earlier. A year ago, the 30-year fixed mortgage average was 3.51 percent. Fifteen-year fixed loans averaged 2.20 percent, down from 2.21 percent a week earlier. A year ago, the 15-year fixed mortgage averaged 3.00 percent.

On January 7, 2021, the 30-year fixed mortgage average hit a rock bottom 2.65 percent, the lowest rate in the survey’s history, which dates back to 1971. Home loan rates set record lows 16 times in 2020.

“Even as house prices increase at the fastest rate we’ve seen in years, competition to buy is strong, given the low inventory that exists across the country,” said Sam Khater (right), Freddie Mac’s Chief Economist. “The fact that there are not enough homes to meet demand is going to be an ongoing issue for the foreseeable future.”

“We are also seeing a marked reduction in the time it takes to sell a home,” noted Nathan, a North Side broker since 2000. She says the average time needed for a home to go from newly listed to under contract was 76 days in the fourth quarter, 22 days less than during the same period in 2019.

Nathan says demand for single-family homes, which was strong during the third quarter, was even more evident in the fourth quarter across the Chicago area, including the North Side. Single-family sales on the North Side increased 58.2 percent for the quarter, while sales gained 25.2 percent in all of Chicago and 38.7 percent in the seven-county metro area.

The median sales price for single-family homes rose only slightly on the North Side, gaining 0.5 percent to $1,015,000, while for the overall metro area it jumped 19.1 percent to $280,000.

Meanwhile, the attached-home market, which accounts for nearly 85 percent of North Side home sales, also experienced increased activity. Fourth quarter sales volume was up 16.7 percent to 1,920 units, and the median sales price climbed 6.4 percent to $352,250.

“Attached-home sales volume was up in every North Side area except the Near North Side, where sales declined 5.9 percent, largely because high-rise units are selling more slowly right now due to the pandemic,” Nathan said. “However, that is much better than the 16.1 percent decline we saw in the third quarter, so that market may be stabilizing.”

Sales volume of attached homes registered their sharpest gains in Lincoln Square (left), increasing 60.7 percent to 98 units, and in Rogers Park, up 39.3 percent to 124 units, but all areas except the Near North Side saw sales up in double digits. Photo by Colin Andersen

Median prices were more variable in the attached-home category, rising in six communities and falling in three. Lincoln Square was the top gainer, with the median price climbing 24.2 percent to $341,500, followed by Lake View with a 20.4 percent increase to $422,500.

Detached sales rose in eight of the nine communities covered by the North Side Market Report, with Near North staying steady at 11 units sold. The biggest increase was in Uptown, up 150 percent to 10 units, but sales were up at least 50 percent in the seven other communities, led by a 91.3 percent gain in West Ridge.

As for the median sales price, Lincoln Park led the way with a 20.9 percent gain, followed by Lincoln Square at 19.9 percent. Four communities did see their median prices decline and all by double digits. Near North Side was off 18.4 percent, Rogers Park was down 13.7 percent, Uptown was down 14.3 percent, and Edgewater fell 13.5 percent.

Nathan noted that a lack of inventory continues to constrain single-family sales in some North Side communities. For example, Rogers Park had just two homes for sale at the beginning of January. Other areas with less than a three-month supply of homes on the market at that point were Edgewater, Lake View, Lincoln Square, North Center, and West Ridge.

North Side Median Prices – 4Q 2020