Home sales are down -11.6% annually across the Chicago area as a lack of inventory and the usual seasonal slowdown takes effect. Prices continue to rise, with year-over-year average prices up a robust 9.7%. By comparison, home prices nationally increased 4.5%. CoreLogic forecasts national home prices to rise 2.6% in the coming year. Once again, there is plenty of demand for homes but inventory is lacking.
Sales in various area towns in Starck Real Estate’s service area reflect this trend with annual home sales down in Arlington Heights -29%, Crystal Lake -20%, Huntley -17%, McHenry -27%, and Palatine -33%. Meanwhile, year-over-year median prices have risen in Arlington Heights 9.5%, Crystal Lake 6.9%, Huntley 0.9%, McHenry 4.0%, and Palatine 10.8%.
This pattern is expected to continue according to Dr. Daniel McMillen, a professor of real estate and associate dean for faculty affairs at the University of Illinois Chicago College of Business Administration “The number of sales continues to decline throughout Illinois, while prices continue to increase. Our forecasts indicate that these trends will continue over the next three months throughout the state.”
Economic conditions are favorable as Illinois added 9,500 jobs in September with wages increasing 6.4%. Unemployment in Illinois fell to 4.2% from 6.1% a year ago. Nationally, the job market remains strong with unemployment at a 50-year low of 3.7%.
In another encouraging sign for the US economy, labor productivity increased 5.2 percent in the third quarter of 2023, the U.S. Bureau of Labor Statistics reported. Increasing labor productivity indicates that wages are going up without increasing inflation. Consumer prices in the Chicago-Naperville area rose 2.5% versus 3.1% nationally in November from a year ago, according to the US Labor Department, as volatile food and gas prices eased. Housing is the one area where prices continue to climb aggressively.
On December 13 the Federal Reserve announced that it was holding its key interest rates at 5.5% and signaled 3 rate cuts in 2024. This sent the stock market soaring, with the Dow Jones Industrial Average up 500 points. The next day 30-year conventional mortgage rates dropped below 7%.
Falling mortgage rates will encourage those thinking of selling to make a move and possibly break the inventory log jam in 2024.
If you are thinking of buying or selling a home, you need an expert on your side. Call us today at 847.485.2500 for a free real estate review!