While housing seems to continue to show signs life, it will be an ongoing fight. The month’s supply of inventory for Chicago single family and attached condos and townhomes are both below four months (rate at which the current inventory will take to sell, based on current sales rate) indicating pointing to a seller’s market. Supply is also down many market segments have ramped up sales with closings up from one year ago for single family homes and attached condominiums and townhomes.
Part of the recovery is due from the ongoing drop in the unemployment rate, which for the Chicago-Joliet-Naperville, IL Metropolitan Division was 8.9% for Dec 2012 which is down from Dec 2011’s 10.1% (Source Illinois Department of Employment Security).
Developer’s looking to take advantage of a hot rental market, have converted existing or planned projects into rental projects – lessening inventory in several areas. Chicago area real estate investors are taking note of how rental rates will be affecting as new rental units are added into the market. For Chicago area single family homes, the number of new listings were down 12.1% compared to the year prior, while sales were up 12.4% and under contract real estate (contingent and pending) were up significantly increasing by 43.7% from the year prior.
With distressed properties, lender mediated sales (short sales, foreclosed, REO, pre-foreclosure real estate properties) have increased 16% from the year before. Short sales have decreased this past year by 6% with REO properties increasing almost 11%. Not to be overlooked, are traditional sales, which had a large increase this past year, with sales 27.1% higher than 2011, pointing that many that have been on the sidelines are entering the market.
Buyers will have their hands full, competing against other purchasers and investors with potentially dwindling supply and slowly increasing prices. Not all areas are showing healthy statistics, while employment, property values and the current economy are still on everyone’s minds.