November 29, 2022

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Chicago homes for sale at lowest inventory in at least 13 years

Usually an inventory of four to six months is considered a healthy, balanced market. Inventory was at its peak, 16 months, in December 2009, during the post-housing crash recession.

The market is so tight now that “the only homes that aren’t selling are overpriced or quirky places with a limited audience,” said Susan Maman, an @properties agent based in Glencoe. “Some of us have never seen a market like this.” Inventory was in the range of three to seven months from January 2013 through October 2020, when the year’s booming market cut the stock of homes on the market to 2.8 months. 

With the holidays and cold weather, the end of the year is typically a low-inventory time, but to be clear: The 1.8-month figure for December compares to inventory of at least three months in each of the four prior Decembers and inventory over four months in each of the three Decembers before that. 

Ten years ago, the Chicago-area real estate market closed out 2009 with 11.6 months of inventory available. 

The 1.8-month inventory figure is areawide and papers over such slow-moving pieces of the region as the Loop. In December, Crain’s reported that the condo market in the heart of the city had a logjam: 24 months’ worth of unsold condos in a place that has been nearly emptied out by COVID restrictions and 2020’s looting episodes. 

“It’s kind of a tale of two cities,” said Jenny Ames, a partner in the Engel & Volkers Chicago brokerage. “The market is definitely tighter on single-family homes outside downtown, where you see a lot of inventory and longer market times.” 

The dearth of homes for sale isn’t isolated in the Chicago area; it’s nearly nationwide. The available inventory of homes is down from a year ago in 48 out of 50 U.S. metropolitan areas, according to a report released this morning by Realtor.com. In Chicago, there were about 34 percent fewer homes on the market in late December than at the same time a year ago, according to the report. Inventory is down more than 50 percent in several metros, including Denver; Austin, Texas; Dallas; and Charlotte, N.C. 

The only two metro areas with more properties listed now than a year ago are San Francisco and San Jose, Calif. 

Chicago-area sellers clearly are in the catbird seat, but Maman cautions that they should “look carefully at how willing to sell they are” at current prices, which even with the 2020 run-up have not yet caught up with the 2006 peak. 

Buyers, Maman said, should “do whatever they can to accommodate the seller.” That means putting no contingencies into the offer contract and being preapproved for a mortgage. 

One way to curry favor, particularly in multiple-offer scenarios, is to ask the sellers when they want to close, Maman said. Offering them that flexibility on their own move can cast the buyers in a positive light. 

Ames said that while “a lot of consumers think they can do it all themselves on the internet,” one thing they can’t do is unearth the pocket listings that connected agents like her know about. Private listing networks, agents’ lists of clients who plan to sell sometime later but not right now and other tools for accessing unseen inventory become particularly useful in a low-inventory market, she said. 

This story and the headline have been corrected to reflect that the Chicago area has the lowest inventory of homes for sale in at least 13 years, not the lowest number.