LIL' BUDDY'S BLOG - THE CHICAGO CONDO CONUNDRUM!
THE CHICAGO REAL ESTATE MARKET, AND OTHER THINGS CHICAGO, FROM THE POINT OF VIEW OF A LITTLE WHITE DOG!
I bet you didn't think I knew what the word "conundrum" means! I would imagine most humans don't know what the word means - but most of us dogs DO know, we just need to let on we don't, or our humans get REAL NERVOUS!
A "conundrum" is a puzzle, a riddle, usually with an intricate answer. As in, "What's going on in the Chicago Condominium Market these days."
Grab a bone, folks! Perhaps I can shed some light on the subject.
As of this afternoon, Thursday, July 26th, 2007, according to data from the Multiple Listing Service of Northern Illinois, there are 13,939 Active Condo Listings on the North Side of Chicago. These unsold condos have been on the market an average of 166 days, for an Average List Price of $426,152.
New Condos are added to the market, from Chicago Association of Realtors Data, July 10, 2007, at the rate of 1,026 each week. Compare that rate to 1,057 for the week ending July 10, 2006, and 831 for the week ending July 9, 2005. Using these figures to average, over 23% more condos are hitting the market in the city each week versus two years ago - a strong increase - but an incredible level of inventory!
Between April 1, 2007 and June 30, 2007, 2,705 condos were closed in the City of Chicago. One year ago, during the period April 1, 2006 through June 30, 2006, 6,488 were closed. That is a staggering drop in sales of 58.3%! The Average Market Time for sold condos is 127 days, versus 104 days one year ago - or a 22.1% increase in time on market. The Average Sale Price increased to $365,422, from $349,893 - a more modest 4.4% increase in average price to the Summer of 2006, to the Summer, 2007.
In addition, 3,447 condos in Chicago are under contract, waiting to close, with an average listing price of $420,756 - total volume in excess of $1,200,000,000 of condos waiting to close. Many of these condos are new construction units downtown.
What's all this mean to the average guy or lady on four paws?
Well, the bloated inventory means that those condos that are selling are in the best shape - when a buyer has a lot to choose from, they can afford to be very picky. Increased listing times assumedly include the rest of the condos, waiting to sell. Two years ago, the market was a lot different - condos sold quickly, despite being less pristine, or with less-than-top-quality finishes. Market time was lower, and people paid inflated prices - if they wanted to lock in any available condo at all. People pay good money these days - but only for the cream of the crop!
The lesson, you human condo sellers? Q-tip clean and stage your units to sell - and price them correctly, without "testing" high - unless you have a very unique condominium - honestly!
Let's take a look at condos at different price levels (sold condos over the last three months) -
MAX CONDO PRICE ACTV INVENTORY AVG. MKT TIME AVG SELL PRICE SOLD INVENTORY
LESS THAN $250M 4,259 115 DAYS $195,231 897
$250M TO $500M 7.021 131 DAYS $351,333 1,501
$500M OR GREATER 2,715 136 DAYS $804,383 391
SOURCE: MLSNI DATA
No matter the price level, condos are taking, on average, over four months to sell. Instinctively, you might feel that cheaper condos would sell quicker, more expensive ones more slowly. Not so - again, look at the high inventory levels across the board, and note the generous incentives - plasma screen TV's, Hawaiian vacations, even school tuition accounts for your kids- that many new and rehab condo developers are offering. There seems to be a slightly stronger market at the high end - see the average selling price of plus-$500,000 condos - but every seller is suffering through extended market times, and lowered eventual sales prices.
Hey, did you ever think a little white dog would be so strong with statistics? Only here to help you - I am "Man's Best Friend" you now!
I await your growls - drop over anytime!
YOUR ACE REPORTER ON FOUR PAWS,
BUDDY HOLLY MOSS
