It has often been said that the top end of the market is the last to cool off and the first to rebound in a housing cycle. I thought it might be interesting to look at the statistics in the Chicago marketplace (city of Chicago) to see if there is a story to be told. I looked at sold properties for the full year of 2006 and compared them to the 2007 sales to date. For the purpose of this study we are defining high end homes at $1,000,000+.
In 2006 there were 434 single family homes sold with an average sale price of $1,673,223 with an average market time of 149 days.
In 2007 so far there have been 388 single family sales with an average sale price of $1,716,713 with an average market time of 179 days.
So the single family home sales for 2007 have followed the headlines somewhat in that it has taken about 20% longer to sell 10.5% fewer homes but at an average of 2.5% increase in sale price.
We find a more optimistic story in the condominium market:
In 2006 there were 373 condos sold with an average sale price of $1,757,204 with an average market time of 210 days.
In 2007 so far there have been 393 condo sales with an average sale price of $1,636,726 with an average market time of 208 days.
So the condo market has been healthier in number of sales (up 5.3% so far) and quicker sales (2 days faster) but has seen the average price ease by 6.8% so far in 2007.
The active inventory of single family homes stands at 533 at this date. This represents 16 1/2 months of inventory at the current rate of absorption. Anything over 6 months inventory is a bearish factor that weighs on the market place. Also, actual available numbers of homes are usually under reported at this time of year and we should expect that number to increase significantly after the first of the year.
The active inventory of condos stands at 685 at this writing. The represents almost 21 months of supply at the current absorption rates. This is also a bearish predictor for the condo market in the near term.
Current list prices for single family homes average $2,038,824 which indicate they are listed over 16% higher than average sale prices which should necessitate price reductions to achieve sales.
Current list prices for condos average $1,883,868 which also shows a spread of a little over 13% to sale price which indicates a downward pressure should be coming on list expectations.
Current market time for active homes is already 8% longer than the sold average but the market time for condos is at 291 days-an amazing 40% longer time than successful solds!
Put his all in your crystal ball—I think that there will be more side movement in prices with increasing inventories and lengthier market times before we turn the corner on this housing cycle.
