Chicago-Area Housing Sales Decline And May Not Improve In 2019
Home sales activity in the Metro Chicago area slowed in November, according to a Re/Max analysis, due largely to continuing weakness in the entry-level segment.
November sales totaled 7,927 units, down 1.3% from the same month last year. Sales of homes selling for less than $300K fell 5.8%, and all other sales rose by 7%.
A lack of supply caused by the aftermath of the Great Recession helps explain some of that entry-level weakness.
“We had a lot of investors out in the housing market, and they really gobbled everything up,” said John Brennan, owner of Re/Max Enterprises, Downers Grove, and Re/Max of Naperville.
Owning a big slice of the affordable housing market has been good for investors' bottom lines.
“They’re getting good money, rents are increasing, and with the rental market so strong, few seem inclined to sell,” he said.
According to Re/Max, the Chicago region only has a 2.9-month supply of homes for sale priced under $300K. The rest of the market has a nearly six-month supply. Conditions may not change much in the coming year.
“Prices continue to grow modestly, but the forecast for the next three months suggests a slowing trend,” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois. “Consumer sentiment indicators suggest concerns about the short-term outlook with volatility in the stock market and rising interest rates dampening expectations.”
Brennan believes the market for entry-level homes will strengthen over the long term as millennials start getting married and having children.
“Renting downtown is a lot of fun, but I think some of them are going to want to set down roots,” he said.