This spring homebuying season could be a difficult one for first-time buyers and middle-income consumers in Chicagoland, according to a recent analysis from Zillow.
According to the company’s April Real Estate Market Report, the inventory of homes in Chicagoland’s lower- and middle-price tiers have fallen 15.1 and 16.7 percent in the last year, while top-tier inventory has fallen a relatively manageable 1.8 percent. With affordable inventory falling, the median sales price has continued to rise, further complicating the homebuying plans of middle-class consumers.
Inventory Woes Threaten Housing
Chicagoland’s inventory woes are hardly unique. Nationwide, entry-level inventory is down nearly 8 percent year-over-year, while overall inventory is down 3.4 percent.
Svenja Gudell, Zillow’s chief economist, said the supply and demand mismatch will create struggles for prospective buyers.
“New construction has been sluggish over the past year; we’re building about half as many homes as we should be in a normal market,” Gudell said. “There still aren’t enough homes on the market to keep up with the high demand from every type of homebuyer. In many markets, those looking to buy a home in the bottom or middle of the market will need to be prepared for bidding wars and homes selling for over the asking price. This summer’s selling season’s borders will most likely be blurred again as many buyers are left without homes and will need to keep searching.”
Our chart below spells out the inventory issues in the nation’s largest housing markets:
| Metro Area | Bottom Tier Inventory Change | Middle Tier Inventory Change | Top Tier Inventory Change | Total Inventory Change |
|---|---|---|---|---|
| Atlanta | -19.7% | -20.7% | -3.8% | -12.5% |
| Boston | -22.3% | -14% | 14.4% | -6.4% |
| Chicago | -15.1% | -16.7% | -1.8% | -9.8% |
| Dallas | -32.1% | -35.1% | -11.9% | -21% |
| Los Angeles | -19.4% | -10.8% | -1% | -8% |
| Miami | 10.3% | 16.6% | 21.9% | 18% |
| New York | -10.8% | -4.1% | 4.9% | -3.8% |
| Philadelphia | 2.3% | -8.7% | 1% | -2.7% |
| Phoenix | -20.2% | -6.6% | -4.1% | -8% |
| San Francisco | -14.9% | 0.1% | 6.1% | -2.1% |
| Seattle | -28.5% | -20.9% | -15.6% | -21.1% |