Weekly Market Update
Presentation below showcases the market activity in the Chicagoland area. This report is updated every week and gives you great insights into how the market is behaving. For any questions feel free to reach contact us and one of our friendly agents will be happy to help you!
April 2020 Market Data
April data for the Real Estate market in the Chicagoland is in and it isn't as bad as it feels. As expected, the number of newly signed contracts in April is down in all three Chicagoland counties (Lake, Cook, DuPage). Click HERE to read more...
March 2020 Market Activity Update
March 2020 shows, as expected, a decline in real estate market activity in Chicago. However, the decline is probably lower than expected by most. Average decline of newly signed contracts in the Cook, Lake and Du Page counties is around 11%, when comparing to March 2019. Most of the slowdown came in the second part of the month when the impact of Covid-19 movement restrictions started coming into effect. Inventory remains very low and the number of people listing their homes on the market in March has dropped over 20% versus the number of new listings in March last year. Both the number of newly signed contract and the number of new listings are expected to further drop in April.
Real estate market is still strong, but the strength of the market and the readiness of buyers to purchase a new property will directly relate to the length of the pandemic and the impact it will have on jobs and salaries on the long run.
Impact of COVID-19 Outbreak on Real Estate Market in Chicago
Chicago, IL – March 25, 2020 - As the world witnesses the spread of the COVID-19 pandemic, all eyes are pointed toward the stock market. How will the pandemic impact world economies? The real estate market has been of special interest.
Many still remember the 2008-2010 economic downturns where homeowners lost all their equity and were forced out of their homes. People all over the world, including Chicago, are wondering if they will soon face the same fate.
2008-2010 Great Recession vs COVID-19-Pandemic
The major difference between the current scenario and the Great Recession is that the latter was triggered directly by the real estate industry. The lack of regulation coupled with the overall economy slowdown resulted in a downward economic spiral that was difficult to stop.
In regards to the current situation, it’s important to note that up until few weeks ago, the U.S. economy was doing well. Chicagoland real estate markets saw an amazing February with over 30% increase in under-contract properties vs February 2018, mainly driven by strong demand and ultra-low interest rates (30-yr conventional mortgage near 3.00%). Stock markets reached their peak on Feb 19th and it looked like 2020 will be the best year since the Great Recession.
What if a Recession does occur?
Most economists are predicting a recession, but that doesn’t automatically mean a loss in property value. During the previous two recessions (2001-2002 and 1990-1991), real estate prices remained stable.
Unemployment and supply
Illinois unemployment rates reached a new low in 2019 of 3.9%. While the unemployment rate due to the COVID-19 Pandemic will inevitably increase, it’s unlikely that it will reach the 2008-2010 levels of 9%+. Even if it should, this may be a short-term spike, assuming the virus is contained by mid-summer.
For 5 years, the limited supply of real estate in the Chicagoland area has pushed values higher. For the right balance, the market must have 6-7 months of inventory available at any given time. In Chicagoland, that supply is currently at 3.5 months.
Don’t panic sell
The best decision sellers can make now is to hunker down and ride out the Pandemic. Selling during the Pandemic will inevitably result in a loss of value. Assuming the virus can be contained in the weeks to come, it’s reasonable to believe that market conditions will return to normal soon. For those in dire need of selling their property, consider consulting one of the discount brokerages in the Chicagoland area. Many offer full real estate services while charging fees as low as 3.5% to sell a home.
Enterprise Realty Brokers is a leading Chicago Real Estate firm focusing on helping clients with the purchase and sale of residential real estate. With our 1% Listing Fee and the unparalleled service, we are the best resource for the sale of your residential real estate.
February 2020 has been one of the craziest months for real estate in Chicago- possibly ever. Demand has spiked to proportions that we have not seen in many years. All three Chicagoland counties have shown a significant spike in properties under contract- between 25-40% (Yes, that's right, 39.6% jump in sales in Lake County) over February 2019. This resulted in the supply of properties in these three counties to reduce to historically low levels. Market activity such as this is unlikely to be sustained long term, particularly due to lack of supply of real estate in general. This puts sellers in the drivers seat of any transaction. With good staging and proper pricing (and of course a good real estate pro), your property is almost guaranteed to sell for a great price!