Chicago Ends 2010 in Tip-Top Shape to Take on the New Year!

Redfin’s monthly Chicago real estate insider report draws from our proprietary database of information on homes for sale and that just sold, along with insight from our agents to get a sense of what’s going on in the market right now. If you’d like to receive the report via email, just sign up.

Greetings Chicagoland Redfinnians!

With the turn of the calendar, it appears many folks have refocused on finding a new home. Although inventory was predictably down in December as many sellers removed their listings from the market until spring, the usual post-New Year’s demand has arrived. Redfin’s clients are on pace for 43% more tours in January than December. Ali Donoghue, a Chicago-based Redfin agent, observed that “Agents definitely seem to be busier. They’re out touring with their clients for longer blocks of time.” So, it seems this is market-wide and not just within Redfin. Of course, this doesn’t necessarily represent a long term trend — but, is typical of the onset of the spring market.

County Compared to Nov. 2010

Compared to Dec. 2009
Cook County -2.6% +4.7%
DuPage County -4.5% +10.3%
Kane County +1.6% +14.9%
Lake County -2.3% +0.2%
McHenry County -0.4% +7.5%
Will County -2.5% +5.7%

Change in # of Houses for Sale on December 31st 2010

With inventory at least temporarily down and the number of active buyers at least temporarily up, the pickings for great deals on good properties are even slimmer. As Patrick Lusk, a Western Suburb Redfin agent, notes: “Many of my buyers are showing interest in only a small subset of the homes for sale, which are quality houses, in good areas, priced right.” The advice to sellers — if you’re considering placing your home on the market, you may beat your competition to the punch by listing sooner rather than later, as long as it’s priced well. Your potential customers are already out looking.

Ready, Willing, But Not Always Able

A major component of the low sales volume, besides many buyers waiting for a bottom, has been the well-known credit crunch. However, Erik Johansson, a Chicago-area lender, states that for many borrowers, “more products are becoming available and others, that already were available, have become more attractive.” He also noted that turn times have shortened, allowing for shorter locks and, therefore, the opportunity for lower rates or better pricing.

On the other hand, especially with many condo projects, often it’s the home that doesn’t qualify for the loan, regardless of the buyer’s qualifications. Greg Whelan, a Chicago Redfin agent, has worked with buyers who “couldn’t buy their first choice because the bank would not lend against the property itself.”

County Compared to Nov. 2010 Compared to Nov. 2010 Adjusted for # Weekdays Compared to December 2009 Compared to December 2009 Adjusted for # Weekdays
Cook County +8.5% +3.8% -20.0% -20.0%
DuPage County +3.1% -1.4% -8.6% -8.6%
Kane County +2.0% -2.4% -14.1% -14.1%
Lake County -4.2% -8.3% -22.4% -22.4%
McHenry County -2.7% -6.9% -24.8% -24.8%
Will County -21.4% -24.8% -41.7% -41.7%

Change in # of Houses That Sold in December 2010

Distressed Deals Tougher to Come By

With declining prices in all categories, areas and price ranges, REOs and short sales continue to make up much of the market. However, getting great deals on these homes is becoming more challenging. As banks have become smarter about divesting these depreciating assets, more and more REOs have been placed on the market at compelling prices. As a result, according to Patrick, they have been “moving quickly” and often at bid-up prices. In these scenarios (and others), cash is king and gets buyers the best deal.

While many have jumped on the short sale bandwagon and banks have had seemingly enough time to improve the process, they don’t seem to be getting any easier. In one regard, Redfin agents across the Chicagoland market have seen a marked increase in the number of advertised “approved” short sales, meaning that the bank has approved the listing price. Intuitively, this would seem to imply they are easier (for these specific listings, they probably are), but because lenders won’t normally even begin the short sale process until there is a contract in place, this is a signal that a previous buyer lost patience and bailed from the deal, before the bank subsequently approved it.

County Median Price in
December 2010
Median $/SqFt Change
since Nov. 2010
Median $/SqFt Change
since December 2009
Cook County $165,000 +2.4% +1.6%
DuPage County $245,000 -3.5% -5.5%
Kane County $153,750 -7.3% -20.5%
Lake County $215,000 +6.7% -4.3%
McHenry County $180,000 +3.3% -8.7%
Will County $182,750 -2.2% -13.5%

Change in Median Price of Houses That Sold in December 2010

It’s interesting to note the bump in Cook County’s median price per square foot. My guess is it’s an anomaly and not the beginning of a trend.

If you want even more data including specific cities, town and neighborhoods, be sure to download our master spreadsheet and dive into all the data you ever wanted. To learn more about how we calculate these numbers, check out our methodology page. If you have any questions or feedback about our report, just leave a comment below!

Best,

Mark Reitman
Chicago Market Manager