Chicagoland homes are still selling faster than ever, and inventory levels have dropped to record lows, according to a report from the Mainstreet Organization of Realtors.
The association reports that single-family detached homes spent 55.2% less time on the market in May, compared to the same time last year, while condos sold 36.2% faster.
MORe Board of Directors President Linda Dressler says the uncertainty of the pandemic has created the inventory squeeze, causing some reluctance to jump into the market.
“Buying at the top of the market can be scary,” she tells Chicago Agent magazine, but Dressler noted that low interest rates still offer a great deal for buyers. “They are still creating their own wealth; they are creating their own equity.”
The May report notes that the Chicagoland area only has about six weeks of inventory at this point — that’s compared to the four or five months of inventory in a healthy market.
Dressler said buyers need to consider their own circumstances when considering buying, but many are still finding homes at reasonable prices. “However, other buyers, especially first-time buyers, may decide they are better off waiting a few months for more inventory to open up,” she said in a press release.
MORe CEO John Gormley said the inventory shortage is partly due to a shortage of new construction. “We’re seeing similar pressures across the country, which is why the National Association of Realtors wants to create incentives for homebuilders to help meet the growing housing demand,” Gormley said in the press release.
Dressler said that although there has been a lot of talk about a housing bubble, NAR Chief Economist Lawrence Yun has assured that the market is not headed for a crash, arguing that the prices have been driven largely by the supply shortage.
Realtor Magazine noted in early May that unlike in 2006, lenders are more conservative about the loans they approve. In that market crash, roughly 40% of the loans were risky with adjustable rates and balloon payments. Those kinds of loans now only make up about 2% of the market, according to the publication.
The MORe report added that the amount of time that detached single-family have spent on the market dropped in the following suburbs: Aurora (64.3% decrease in time spent on market); Bartlett (down 87.5%); Batavia (down 85.7%); Brookfield (down 68.3%); Buffalo Grove (down 76.0%); Carol Stream (down 85.7%); Downers Grove (down 67.7%); Lake Villa-Lindenhurst (down 75.3%); Montgomery (down 83.3%); Mundelein (down 82.4%); Niles (down 77.7%); Oswego (down 76.4%); Palatine (down 69.8%); Park City-Waukegan (down 73.2%); South Holland (down 66.7%); Streamwood (down 75.0%); Sycamore (down 63.3%); Tinley Park (down 81.3%); Villa Park (down 71.9%); Wauconda (down 83.5%); Wheaton (down 66.7%); and Zion (down 81.9%).