Conditions of the Real Estate Market Year End 2007
Happy New Year its 2008, this is the time I do an analysis of the results of the real estate market for 2007. This is not to forecast what will happen in the coming year, rather it is an attempt to try and understand the Condition of the Chicago real estate market at present.
As an appraiser I use some basic statistics that are obtained from data obtained from the Northern Illinois Multiple Listing Service. The MLS database records the results of all listings that were made with a Realtor, private sales by owner and some builder sales are not a part of these results.
The important statistics I will report on are the differences in average sales prices at the end of 2007 vs the end of 2006, was there an increase or decline?. Marketing times, are they increasing? How many active listings are there in the neighborhood now, and what is the absorption rate for all this inventory. In other words, how long will it take to sell.
For the first community I am starting out with the Rogers Park neighborhood in Chicago. Rogers Park is located on the far northeast corner of the city and is located between Lake Michigan on the east, Ridge Boulevard on the west, the Evanston-Chicago city limits on the north and Devon Avenue on the south.
Single family residences in Rogers Park are predominantly attached homes & condominiums. According to data from the Northern Illinois MLS for the year ending December 31, 2007 there were only 23 sales of detached homes and 678 sales of attached homes/townhouses & condominiums.
The average detached home sold for $491,521.00 with an average number of days on the market of 87. The average price at the end of 2006 was $501,304.00 with 126 days on the market.
There are currently 21 active listings as of January 1, 2008. This shows a decrease in sales prices and a decrease in marketing times,the absorption rate for the current inventory is 1.91 sales per month. This gives us almost 11 months of supply based on last year's absorption rate. I would consider the market as oversupplied, however,statistical analysis with only 23 sales is of minimal value, the sample is too small.
For attached homes and condominiums we have a much larger sample of 687 sales in 2007. The total sales for 2006 was 958. The average sales price in 2007 was $229,017.00 vs the average in 2006 of $225,156.00. At first glance prices appear to be appreciating.
It is my opinion that sales were stronger at the beginning of 2007. Interest rates were lower and sub-prime lending was still in full swing. By the second half of the year things had changed and the average sales price for attached homes and condo's had declined to $221,510.00.
Marketing times have increased over the 2006 average of 107 days. The average days on the market at the end of 2007 was 147. As of January 1st there were 656 active listings, at the current rate of absorption of 47.83 sales per month, that's 13+ months of available inventory.
Based on the above it is my opinion that prices are declining, the market is oversupplied and long marketing times should be expected.
Its important to note that these statistics are for the Rogers Park neighborhood overall. They give us an indication of what is happening, however, your property may have reacted very differently to the market. One bedroom units react differently to three bedroom units. If you are involved in the 2008 real estate market now is the time to get an appraisal. Find out the current market value of your property and how to position it for a sale. Only the best priced properties will sell in this market.
Citywide Services performs real estate appraisals in Chicago & Suburbs.