By Don DeBat

21-Jun-23 – The bad news is that May was the 15th consecutive month of year-over-year home sales declines in the Gold Coast, Lakeview, Near North Side, North Center, Old Town, and Lincoln Park neighborhoods.

“Historically low inventory and listing levels and strong buyer demand continue to make this market as frustrating as it is promising,” noted Realtor John Irwin (left), co-author of Baird & Warner’s June 2023 market analysis with broker Jackie Lafferty.

“While we have experienced more than a year of home sales declines, May of 2023 represented the second consecutive month of median home price increases. Home prices on the North Side have been one of the most interesting and perplexing aspects of the current market,” said Irwin.

Baird & Warner’s June analysis also noted that North Side home prices have remained fairly stable in comparison to the Chicago-area suburbs and other parts of the nation.

“The North Side market posted a solid 8.5 percent overall price increase in May when compared with the same month a year ago, and today prices are now even with year-to-date numbers from 2022,” Irwin explained.

In April, median prices squeaked out an increase of only 0.3 percent on the North Side.

Lincoln Park and Old Town home prices rose a solid 11.2 percent in May, compared with last year. North Center posted a robust 24.5 percent gain compared with 2022. Both of these hot neighborhoods have experienced slow but consistent price growth since 2020 and COVID, Baird & Warner noted.

Home prices in Lakeview have been flat during the same time period. The Gold Coast and Near North Side have had a more difficult time with pricing, according to Baird & Warner’s analysis. Prices on the Near North Side slipped 6 percent in May.

“The Near North Side offers buyers more of a choice of homes, keeping prices competitive,” Irwin said. “However, two months of price increases on the North Side does not necessarily indicate a trend, and sellers should note that the current pricing data is not a license to overprice their home. Pricing your home for sale should include comparable properties along with price per square foot of living area and appreciation analysis from your specific neighborhood.”

The past few months have shown that many prospective buyers will compete in multiple-offer scenarios, but “they will not get involved in over-priced bidding wars,” noted the Baird & Warner analysis.

Mortgage rates down slightly

On June 4, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home loans averaged 6.71 percent nationwide, down slightly from 6.79 percent a week earlier. A year ago, lenders were charging an average of 5.23 percent for 30-year fixed loans. Fifteen-year fixed loans averaged 6.07 percent on June 4, down from 6.18 percent a week earlier. A year ago, the 15-year average was 4.38 percent.

The Freddie Mac survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit.

“Mortgage rates decreased on June 4th after a three-week climb,” said Sam Khater (right), Freddie Mac’s Chief Economist. “While elevated rates and other affordability challenges remain, inventory continues to be the biggest obstacle for prospective home buyers.”