Are we in a Chicago market recovery?
In my last blog I discussed the national real estate market. The more relevant question is what is the trend in the local Chicago market? The real estate market trends in one neighborhood and or at various price points can vary dramatically. Basic economics are about supply and demand. How much inventory is available and how many people want to buy determines the direction of prices.
Is Chicago a buyers’ or a sellers’ market? The best way to address this is to look at inventory by price point and neighborhood. Typically one to four months of inventory means it is a sellers’ market and you will begin to see appreciation in pricing. Five to six months of inventory is when prices stabilize and seven + months of inventory is a buyers’ market and often you will see prices decline.
This week I would like to address the Near North Side Chicago condo market as of September 2012 with other markets to follow in my subsequent blog posts. The Near North Side includes the Gold Coast, River North and Streeterville areas.
Near North Side Condos: If you are in the market in the Near North Side and looking within a price range of $200K-600K, the supply is 4 months or less. This indicates a sellers’ market. With low inventory prices are about to go up. If you want to purchase a Chicago condo you should consider buying sooner than later. The chart also indicates that between $600K- 800K we have a 6-month supply of inventory meaning prices are fairly stabilized. However on the high end between $800K-1.5M there is now a 7-month supply and it is a buyers’ market. This should provide a good opportunity to negotiate prices. On the luxury end of 1.5M +, with a 16-month supply, it is surely a buyers’ market.
Another observation I made as I poured over the various market trend reports, was that in certain price segments inventory over the past two years has been absorbed quickly whereas in the luxury end of the condo market we still have many challenges. Back in October 2010, inventory ranged from 27 months on the lower end of $200K-300K, 20 months from $300K-400K, 26 months $400K-600K ,42 months $600K -800K and 32 months above $800K +. This clearly indicates that on the lower price points inventory has been absorbed at a healthy pace. In fact, there is a feeling in the market there is a now a lack of inventory. On the high-end buyers have many choices and it is a fabulous time to negotiate a great deal with sellers who need to sell.
In my next blog entry, I will be addressing the Lincoln Park single family home and condo market. If you are looking to buy or sell real estate contact us at 312-953-0961 or vist our site at www.chicagocondofinder.com