Although we've heard some chatter about a possible housing bubble, it's too early to predict a change from the current situation in Chicago, and most other areas of the country, which is higher prices and lower inventory.
Wages have been increasing, but not at the same pace as home prices, and the mortgage interest rates have risen several times this past year. This situation potentially leads to affordability issues that can cause fewer sales at lower prices, in spite of the fact that demand is still outpacing the supply of available homes.
Here's what the housing market looked like in the City of Chicago from January through July 2018, compared to the same period last year.
|New Listings||UP 3.6%||UP 9.4%|
|Listings Under Contract||UP 16.0%||DOWN 1.4%|
|Median Sales Price||UP 2.0% to $255,000||UP 3.1% to $335,000|
|Months Supply of Inventory||DOWN 22.9%||UP 11.5%|
In areas where housing stats are down, the situation is more reflective of low supply than anything else. With a growing economy, solid lending practices and the potential for improved inventory from new listing and building activity, we believe market balance is more likely than a housing bubble.