It’s been an interesting year in Chicago real estate, to say the least. Every week that goes by we have new data to use that helps determine what’s going on and where the market is headed. As of late, the most interesting piece of data I’m seeing is the build in the inventory of condos and the short supply of single family homes. Due to the riots and pandemic, people either don’t want to live downtown or are deciding to hold off on their first home purchase. Meanwhile, those that are buying decided they need more space, and outdoor space as well.
The only way to get those two things while staying within your original budget is to look further out on the city fringes or into the suburbs. Someone looking for a 1 bedroom condo downtown can’t suddenly afford a 2 bedroom to work from home, or the larger condos with private outdoor space. Those that thought they could get by with a 2 bedroom are looking for 3 beds or single family homes. They want the yard, they want the space for the long haul.
I saw this first hand this past weekend when one of my buyers went to check out an open house for a very cute single family home in Portage Park. They fell in love and so I went to see it with them the next day. Apparently there were about 75 buyers through during the weekend and they ended up with ELEVEN offers by Monday afternoon for highest and best. Luckily, we were able to secure the home which I’m very thankful for and happy for them.
Meanwhile, the condos in the city are getting zero to one or two buyers through open houses and the inventory continues to build. The buyers are out there, even in this pandemic before the election and during the fall. It just so happens that they’re looking outwardly.
If you look at the following picture, in the bottom right you can see that attached single family (condos/townhomes) inventory is growing while the detached single family (stand alone homes) inventory is dwindling. There is that mix of things going on, but we are now in a buyers’ market for condos and a strong sellers’ market for single family homes. Months supply of homes for condos is above 6 months for the city as a whole while single family homes is approaching a 2 months supply.
What does this mean for buyers and sellers? Well there are several different things to consider. If you’re buying a single family home, be prepared for multiple offers and going well above list price in many scenarios. If you’re thinking of selling a SFH, now is better than ever. Q1 will be fruitful as well. We will have a shortage of homes for awhile, especially with skyrocketing costs to build.
If you’re buying a condo, you have more leverage. You also have more choices. You can push for a better price. If you’re selling a condo, think about dropping the price or lowering expectations a bit. It’s hard to say what Q1 will bring, but depending on the national outlook, economy, election, etc., I believe it’ll be better for sellers of condos in the spring than right now. However, we could see this trend continue going well into 2021. There’s a lot to consider.
If you’re thinking of buying or selling now or in 2021, call/text me at 847.373.8114 or email me at firstname.lastname@example.org. I can help you analyze the data for your specific neighborhood or give you general advice too. Always happy to help!