15-Feb-20 – Chicago’s North Side existing-home market posted a “complete flip” in four lakefront neighborhoods in January as a “new trend appears to be emerging.”

That’s the opinion of Baird & Warner’s February 2020 Market Analysis for Chicago’s North Side. The analysis, prepared by veteran Baird & Warner broker John Irwin, posted a solid 15.1 percent increase in used home sales on the Near North Side – after more than two years of decreases.

Irwin noted that extremely low home loan interest rates likely were the spark that finally got the market ignited over the past three months. On November 7, 2019, benchmark 30-year-fixed mortgages averaged 3.69 percent, down from 3.78 percent in late October 2019, reported Freddie Mac’s Primary Mortgage Market Survey. A year ago, rates averaged 4.94 percent.

(Above) Freddie Mac’s Primary Mortgage Market Survey as of February 13.

Rates have stayed low throughout November, December, January, and early February, fueling the year-end market boom. On February 13, 2020, Freddie Mac reported that lenders were quoting an average of 3.47 percent on 30-year-fixed loans. A year ago, the 30-year-fixed loan average was 4.37 percent.

Mortgage rates reached a historical rock bottom on November 21, 2012, when the 30-year fixed mortgage average hit 3.31 percent, according to Freddie Mac’s archives. That milestone could be surpassed in early 2020 if current trends continue.

“With mortgage rates hovering near a five-decade low, refinance application activity is once again surging, rising to the highest level in seven years,” said Sam Khater (left), Freddie Mac’s Chief Economist. “This surge, coupled with strong purchase activity, means that total mortgage demand remains robust, reflective of a solid economic backdrop and a very low mortgage rate environment.”

Here are the highlights of Baird & Warner’s February market analysis, which the firm compiled directly from the Chicago Multiple Listing Service...

• Home sales. North Side home sales in January rose 19 percent over January 2019. Homes priced from $500,000 to $1 million rose 7 percent. Lincoln Park led the four neighborhoods with a 46 percent increase in unit sales, followed by Lake View with a 17.4 percent gain. Sales in North Center slipped 2.8 percent.

• Median prices. Prices continued to ease in January. Median existing home prices decreased 4.5 percent in Lincoln Park and plummeted 29.7 percent in North Center. The median is a typical market price where half the homes sold for more and half sold for less.

“Some of the price declines could be attributed to price adjustments to inventory that has accumulated excessive market time,” noted Irwin (right). “Sellers are becoming more realistic about pricing in this market.”

• Market time. Despite the positive January numbers, market times continue to increase. January saw an 11.1 percent rise in market time which was significantly higher than 3.4 percent for all of 2019.

For more information on Baird & Warner’s January 2020 Market Analysis for Chicago’s North Side, contact John Irwin at john@johnirwinchicago.com or 773-294-8664.