Low Inventory Pushes Chicago Home Prices Higher in July

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Chicago’s housing market continued to regain its footing in July, as sales rose heartily and a fast-moving market with insufficient inventory to fill demand led to a strong increase in prices.

In July, the median price to sell a home in the nine-county Chicago area rose 18.3 percent, to $201,075, the Illinois Association of Realtors reported Wednesday. During the month, 11,897 homes were sold, up 36.1 percent from July 2012’s 8,744 home sales.

Within the city of Chicago, the median price of a home that sold last month was $250,000, a 25 percent increase from July 2012’s $200,000. It was the best July performance for median prices in the city since 2008 but on a month-to-month basis, it was topped by June’s $254,900 median price.

Chicago condo prices also rose to a median price of $280,000, up 13.8 percent year over year. Overall, monthly sales of homes in the city increased 31.1 percent, to 2,838 properties.

The number of homes listed for sale last month in the Chicago area was down 35 percent from a year ago. That undersupply of homes is continuing to help push prices higher, as bidding wars ensue, and slashing the time a home is on the market.

For the entire Chicago area, the average time it took to sell a home was 61 days, compared with 83 days in July 2012.
Also helping prices is the effect of fewer distressed sales, sold at a bargain, that help push down the sales price of comparable properties and the median prices for the market as a whole. In July, distressed sales accounted for just under 30 percent of all transactions, according to Midwest Real Estate Data LLC, the local multiple listing provider. That compares with almost 50 percent in the early part of the year.

And, while short-sale transactions are lagging, foreclosed or bank-owned properties remain in high demand. Foreclosed properties that sold in less than a month sold for 105.5 percent of their list price, Midwest Real Estate Data said.

In Chicago, market time last month was 48 days, compared with 69 days in July 2012.  On average, the monthly commitment rate for a 30-year, fixed-rate mortgage in the Chicago area in July was 4.35 percent, compared with 4.09 percent in June and 3.54 percent in July 2012, according to the Federal Home Loan Mortgage Corp.

“Slight increases in interest rates over the past few months have done little to slow interest in homeownership,” said Michael D. Oldenettel, president of the Illinois Association of Realtors, in a statement.

This article was originally published in the Chicago Tribune on August  21, 2013.