September Market Update

Happy September. Labor Day weekend is now behind us, kids are back in school, and we’re still continuing to adjust and react to changes in the world around us. What is the new normal? I’d venture to say, we just don’t know. But if we stay informed, keep on our toes, and allow ourselves to be flexible, we should be in good shape as we approach a Chicago fall, and beyond. 

With that note, I’m going to focus very heavily on statistics and market data this month. 

As we look at home prices year-to-date, you may be surprised to learn that condo prices haven’t moved all that much, at least in the areas where we most commonly work. Depending on how you slice the data, condo prices have been flat, in our core market area, or up about 1.5% for the city of Chicago, year-over-year. Chicago single family homes, on the other hand, have seen a great deal of appreciation, with more than a 20% boost in prices as compared to this time last year. In fact, we first began to see a steady climb in July of 2020, which we reflect back on now as our sort of “delayed spring market”. Since July 2020, single family (detached) Chicago homes are up 23.5%, a climb of nearly 2% a month. 

To what can we attribute this climb, and is this a bubble, or will we continue to see prices grow? The first part of that question is easier to answer than the second. 

Inventory. Simply put, there has been a shortage of single family home inventory since the number started to decline in June of last year - from 4.0 months of inventory in June 2020, to 3.1 months of inventory in January of this year, to the current statistic, which is just 2.3 months of detached home inventory in the city of Chicago. The number has been on a steady decline, and is the lowest we have seen it in the fifteen years I’ve been selling real estate, and possibly the lowest it has ever been. 

Are we in a bubble? This requires more discussion than we have real estate for in this newsletter (if you’ll forgive the pun.) But, I’d strongly suggest that we are NOT seeing a real estate pricing bubble. The shortage of home inventory is very real. There have been very few new homes built in recent years; we have not created new stock. Contrary to water cooler conversation, Chicago’s population has increased in recent years (a reversal from the 2010 census figures where we saw some decline), interest rates remain very low (and we can sustain higher ones), and home inventory for single family homes is at an all time low. Similarly, condo inventory, which has not experienced a huge growth in value, has a consistently modest inventory which currently sits at a very balanced 4.7 months. Condo inventory in the city of Chicago has sat between 4 and 5 months since the summer of 2013, and has grown at a pretty consistent 4% per year. If our flat growth in 2021 is any indication, demand may have shifted just a bit, from a shared space, to four walls to call your own, but I expect to continue to see condo prices grow at a modest rate. 

As with real estate market reports of any kind, we paint in broad strokes. Gives us a call or shoot us an email to understand what is happening to your property type, in your neighborhood. The answer may not be the same as the city at large. Grab a pumpkin latte, bust out your long sleeves, and turn on some football. It’s time for my favorite Chicago season. 


All the best,
- Jason Finn

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