The news is pretty typical for the month of January: sale prices for single family homes (SFH) in almost every county across the area fell last month. This is what we expect to happen in the wake of the holidays and the season slowing down with the colder weather. But in DuPage County, prices increased by 6.8% from December to January. Inventory in DuPage hit its 2011 bottom in December when the number of SFH for sale dropped below 4,000. Redfin’s DuPage Agent Patrick Lusk explains that “low supply caused fierce competition over the homes that were available, and the bidding wars that ensued drove prices up the following month when the transactions closed.”
Meanwhile, January was a huge month for Chicago area buyers. The weather was mild, so people who have decided that this is the year they are going to buy skipped their winter hibernation and got a head start on the market. “If demand continues on its current path,” Patrick said, “we can expect prices to take similar hikes, especially if inventory doesn’t pick up dramatically.”
For a complete picture of the local market’s most recent stats and trends, download the Redfin Market Report here: Redfin-Chicago-Real-Estate-Market-Report-January-2012. Want to know how the Chicago real estate market is doing compared with the rest of the country? Take a look at the Redfin Heat Index:
*Redfin Heat Index Methodology
The Redfin Heat Index (Beta) uses listings, sales, and price changes to determine the relative “heat” of a given real estate market. We set a baseline Heat Index of 75.0 at 6.0 months of supply and +5 % price change year-over-year.
Every percentage point increase in prices above the 5% baseline will increase the heat index by two points, every percentage point decrease in prices below the 5% baseline will decrease the heat index by two points.
Every one month of supply increase above the 6.0 baseline will decrease the heat index by seven points, every one month of supply decrease below the 6.0 baseline will increase the heat index by seven points.
Here’s the formula:
- MOS = Months of Supply: End of Month Inventory / Closed Sales in the Month
- $YOY = Year-over-year change in the median price per square foot.
- Heat Index = ((MOS – 6.0) * 7) + (($YOY – 5%) * 2) + 75