Home values continue rising. The median sales price of a home in the Chicago metro area climbed 11 percent during the first half of 2015 when compared to the same period in 2014, coming in at $210,222. That is the highest median sales price recorded for the period since 2008.
The average time required to sell a home was 100 days, two days longer than in 2014. A combination of factors is at work – mortgage interest rates remain low, the economy is adding jobs at an encouraging rate and there's a larger inventory of homes for sale. Also contributing to the improved market has been the steady increase in home values over the last few years. That has reduced the number of so-called underwater homes, where the property is worth less than the mortgage balance, and it has allowed many owners eager to relocate to do so.
Another reflection of the healthier housing market is the continued reduction in the number of distressed properties, primarily short sales and foreclosures, being sold. The City of Chicago, which accounted for 25 percent of all first-half home sales in the metro area, saw sales activity rise 9 percent to 13,328 units and its median sales price climb 10 percent to $267,000.
There's been a fair amount of new construction in Chicago over the last 12 months and it has been concentrated in a few really hot areas. Also, as you might expect, the character of this new construction is very different depending upon the area.
West Town, Logan Square, and North Center are the hottest areas. West Town has more condos being built than any other area, but Logan Square has more single family homes being built.
The most expensive areas are in the Near North Side, Lincoln Park, and Lake View. What is a surprise is that Uptown has had some really expensive single family homes built recently. Given their proximity to downtown, West Town and Logan Square appear to have the best values.
Homes are selling swiftly, too, although in most areas the pace has cooled some from the first half of 2014. The fastest-selling homes in the region were condos in the South Loop and North Center. If you have homes that are priced right and in salable condition, the buyers will be there.
Woodridge has been benefiting from being sandwiched between higher-priced Naperville and Downers Grove. People see that the prices are lower than Naperville, and they get interested in Woodridge to the east. They also come in headed southwest from Downers Grove, which is becoming unaffordable.
The median sale price for a Naperville home in the first half of 2015 was $350,000, and in Downers Grove, $300,000. In Woodridge it was $217,750.
The time it took to sell a home slowed this year in the city and all four counties, although in Chicago the decline is barely enough to notice. In all parts of the region they're selling much faster than a few years ago, which comes as a relief to sellers whose patience is tested by slow-to-sell homes.
The 415 condos and other attached homes that sold in the Near South Side area (which includes the South Loop and a portion of Chinatown) moved in an average of 58 days, down from 77 the year before. North Center was close behind, with an average of 59 days for the 225 attached homes that sold, down from 64 days in the first half of 2014.
South Loop has seen several condos in the neighborhood move way faster than the average this year. The neighborhood has really gotten on the map, people are seeing that there are more restaurants and a park every two blocks.
In hot Chicago neighborhoods, some investors have decided that one is greater than two. They're converting rental two-flats into single-family homes, which are in short supply in places like Andersonville, North Center and Lincoln Square. There's such an extreme shortage of houses on the market for the buyers who want to raise their families in these neighborhoods that you've got to find new inventory for them.
The two-flat is a venerable building type in Chicago, containing one upstairs and one downstairs apartment and built by the thousands in the city's neighborhoods in the late 19th and early 20th centuries to house middle-class families. Now, many two-flats in strong neighborhoods are being completely re-worked to eliminate double kitchens and living rooms while their traditional exteriors, usually brick or greystone, are kept intact.
The result: a 3,000-plus-square-foot house with modern details such as a master suite, a family room next to the kitchen and all new utilities, but whose street face "has that classic Chicago architecture feel.
A two-to-one conversion offers a financial fit for both the developer and the eventual homeowner. Two-flat conversions have been around for years, but they've proliferated recently, prodded by the imbalance between supply and demand for single-family homes.
They're prevalent now, There is no solid tally of how many two-flats have been turned into one-flats, but the strategy is more common now than ever before.
Chicago has a lot of attributes that investors are looking for…a host of Fortune 500 companies and a 24-7 urban landscape, but with lower costs.
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