Based on recent speculation in the national news about a cooling housing market, I recently analyzed the Park Ridge market to get to see where prices might be heading. This time I will be looking at the Lincoln Park neighborhood in Chicago. I wanted to compared the current median sales prices vs. those that are under contract and are expected to close in the next 30-60 days. First lets look at a few charts to see how the market has performed over the last year.
Year-Over-Year Median Sales Price (Rolling 12 month average) – As you can see below, while the overall condo market is up 5.6% year-over-year, the upward trend appears to be flattening out and the market appears to be stabilizing.
Months supply of inventory – Supply is down to 2.9 months of inventory but is slowing creeping back up. (down 6.8% year-over-year) Whenever supply is below 3 months of inventory we consider the market to be under supplied.
Average Market Time – The average time it takes to sell a house is significantly less (down 27% year-over-year) but this indicator is also flattening out with the last 4 months having an average market time of 57 days.
List to Sales Price Ratio – The amount the home sells for vs. what it was most recently listed for has only increased about 0.6% year-over-year and has leveled off at a strong 98%. (This can sometimes be skewed as many condos are listed with parking “not included” and then the final sales price includes a $10,000-$25,000 deeded parking space.
Distressed Sales – As you can see below the number of REO (foreclosures) and Short Sales haven’t been a big factor in Lincoln Park over the last few years but still show a positive sign as they are down 49% and 64% year-over-year.
Overall, while the market has had a good year, these statistics are considered to be in the “rear view mirror”. As I analyze the market to help homeowners determine an appropriate listing price for their home, (click here for more info on that process) I analyze forward looking indicators in an effort to be aware of what may be in store for the market.
I decided to use 2 bedroom/2 bath units in an attempt to break out the extreme high end and low end of the market and compare apples to apples. After noting the current median sales price of $408,000, I compared those two data points to a more forward looking data point, pending sales. The current median list price of the units currently under contract is $394,000. That is approximately 3% lower than what has sold over the last 12 months. With the exception of a few hot markets, homes very seldom sell at list price. Over the last 12 months, the list to sales price ratio is approximately 98% (see chart above). Therefore, once the 2% is removed from the pending sale to anticipate the final sales price, there is still a projected decrease in median sales price of 5-6% for those units currently under contract vs. the current 12 month median sales price. Due to their only being approximately 50 units in the pending/under contract data, I expanded the data to include all active listings as well. That brought up the median list price to $400,000 (2% higher than the “under contracts”). But keep in mind, these listings could still experience a lowered list price as they are still not under contract, which could account for the 2% bump.
In summary, while the overall market has been strong over the last 12 months, the Lincoln Park condo market in Chicago does appear to be slowing. However, with such a low supply of inventory on the market, things could turn back up. Also keep in mind that we will soon be heading into the seasonally slower fall and winter months. For more Lincoln Park charts check out our Lincoln Park Page. If you have any questions, please feel free to call us anytime at (847) 863-5776.
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