Low inventory continues to limit home sales, drive prices up
Detached single-family home sales decreased 12.8% in October 2021 compared to October 2020, according to statistics released today by the Mainstreet Organization of REALTORS® (Mainstreet). Attached home sales dropped 10.9% during the same period.
The reason for this decrease is crystal clear: according to Midwest Real Estate Data (MRED), Chicagoland home inventory is now at its lowest supply in a decade. While the low inventory is causing challenges for buyers, sellers are reaping the benefits, with detached home prices up 6.7% and attached home prices up 9.6% over last October.
"We're expecting to see some changes in the market as the mortgage rates change due to inflation," Mainstreet Board of Directors President John LeTourneau said. "Traditionally, we'd expect a surge of demand prior to an expected increase in mortgage rates, but inventory is already too low to meet the existing demand. Once mortgage rates rise, we will see sellers need to adjust their asking prices to meet buyers where they are at, but it may take a few months for this to stabilize."
Contracts increased 10.5% for attached homes in October 2021 over the same time the previous year, and declined only 1.2% for detached homes. However, a higher than usual percentage of contracts are falling through due to homes selling far above their appraised values. According to the latest REALTORS® Confidence Index Survey, about 23% of contracts were delayed, and 12% eventually canceled, due to appraisal issues.
"The market is continuing to respond to new trends in buyer wants and needs due to everything that's happened over the past two years," Mainstreet CEO John Gormley said. "With the tight inventory and continued economic shifts, both buyers and sellers can especially benefit from working with a Mainstreet REALTOR® who will help them navigate the ins and outs of this unprecedented market."
Single-family detached homes showed particularly notable growth in median sales price in the following suburbs: Alsip (19.1% increase in median sales price); Bartlett (15.8%); Beach Park (27.2%); Buffalo Grove (16.0%); Chicago Heights (68.1%); Crete (18.2%); Darien (17.2%); Dolton (40.7%); Evergreen Park (22.2%); Green Oaks-Libertyville (18.8%); Lemont (20.6%); Maywood (26.3%); Monee - Unincorporated Monee (43.3%); Montgomery (26.1%); North Aurora (22.0%); Oak Forest (17.0%); Oak Lawn (20.8%); Oswego (27.5%); Park Forest (63.8%); and Streamwood (20.2%).