Boom Years Officially Over As Chicago Real Estate Prices Finally Fall
According to new data released by the Illinois Realtors, home prices in the Chicago area dropped in April for the first time in over 12 years.
The median price of a home sold in the Chicagoland area in April was $320,000, down 1.5% from the same time a year ago.
While prices from December 2022 through March 2023 were flat compared to their year-ago counterparts, the decline in April is a clear sign that the party for sellers is over at least in some areas.
Some might say well 1.5% is not that much, but consider that the decline is the first monthly year-over-year drop in Chicago-area median home prices since August 2012. At that time, home prices were down 4% from August 2011 as we coped with crash of 2008.
In the city, prices have been dropping for most of the past eight months and have now essentially wiped out all the gains made during the housing boom.
The metro-area price decline is about the same as the national figure. Home prices nationwide were down 1.7% in April, according to data released separately this morning by the National Association of Realtors.
In the city, the median April sale price was $340,000, down 8.1% from April 2022’s median, $370,000. It’s tied with December for the biggest year-over-year decline in city prices since February 2012, when prices were down 8.9%.
The city’s April 2023 median home sale price is just 0.6% above that of April 2020. The COVID pandemic was young then, and most home sales that closed that month would have been deals buyers and sellers made prior to or very early in the shutdown period. Prices at that time were up 9% from April 2019.
City median home prices have been down in seven of the past eight months compared to a year earlier and flat in the other month, September 2022.
April 2022 was the peak for city home prices, according to the Illinois Realtors data. For the metro area, the peak was June 2022, when the median sale price was $340,000.
The median price in April was 5.8% below that, although comparing June to April is imprecise because of the highly seasonal nature of the Chicago-area home market.
The number of homes sold continues to run well below last year and below the average from normal years before COVID and the housing boom.
In Chicago, 2,028 homes sold in April, down 37.6% from April 2022 and down 20.1% from the average home sales in April in the years 2016 to 2020.
In the metro area, 7,593 homes sold in April, down 31.2% from April 2022 and down 23.8% from the April average in the years 2016 to 2020.
Several factors are holding down the number of sales. Chief among them is the low inventory of homes available to buy. Along with that, many buyers have stayed on the sidelines because of increased mortgage interest rates in the past year and ongoing uncertainty about the future of the local and national economy.