As was widely expected, the Federal Reserve did not change the target range for the federal funds rate – currently set at 2.25 to 2.5 percent – during their June meeting. Although the economy is still performing well due to factors such as low unemployment and solid retail sales, uncertainty remains regarding trade tensions, slowed manufacturing and meek business investments.
The Current State of the Chicago Real Estate Market
The market here really depends on whether you are talking single family home or a condo. New Listings in the City of Chicago were down 1.5 percent for detached homes but were up 6.0 percent for attached properties. Listings Under Contract increased 9.9 percent for detached homes and 2.9 percent for attached properties. The Median Sales Price was up 6.9 percent to $277,000 for detached homes and 2.4 percent to $345,000 for attached properties. Months Supply of Inventory decreased 8.7 percent for detached units but increased 15.9 percent for attached units. Take Lincoln Park, there were 141 single family homes for sale last June compared to 121 now for a 14% drop in inventory. Look at Lincoln Park condos, and you see 398 on market last year versus 511 now, a 28% increase in inventory. More importantly, market times UP 48% for condos!
In terms of relative balance between buyer and seller interests, residential real estate markets across the country are performing well within an economic expansion that will become the longest in U.S. history in July. However, there are signs of a slowing economy. The Federal Reserve considers 2.0 percent a healthy inflation rate, but the U.S. is expected to remain below that this year. The Fed has received pressure from the White House to cut rates in order to spur further economic activity, and the possibility of a rate reduction in 2019 is definitely in play following a string of increases over the last several years.