Winter Housing Hibernation, Not Likely in Chicago
2020 Chicagoland Winter Housing Market Review
We can all agree the beginning of 2020 did not start out the way anyone expected. Now the leaves are falling and soon we’ll be ringing in the new year. We don’t need to hear another person chant, “Winter is coming,” because it’s Chicago and snow is inevitable. As winter approaches, potential home buyers must decide whether they will wait until Spring to make any buying decisions; while sellers debate whether to lower their asking price or take their property off the market altogether. Fortunately, the Chicago winter housing market is up from recent years, creating a huge benefit to buying and selling as we close out this interesting and challenging year.
The housing market has natural slow months which coincide with the coldest part of the year. In the last few years, the Chicago market has become less affected by the change in the weather. To take a quick look at the beginning of 2020, the market before the COVID-19 pandemic was exceptionally strong. The Mainstreet Organization of Realtors reported sales were up 10% in December 2019 over November 2019. In January 2020, the Chicago Association of Realtors described a similar upturn by 7.3% compared to the month prior.
“The Chicago winter housing market is up from recent years, creating a huge benefit to buying and selling”
The Covid-19 Pandemic and the Winter Slump in Chicago
With the unforeseen global pandemic, which shocked the world, about 80% of businesses were closed in spring due to the federal government ordered shutdown of the private economy. Even during the spring pandemic, the Chicago Association of Realtors monthly snapshot reports show the Chicago market increasing consistently each month from last year. Owners spent more time in their humble abodes during the spring months and we can assume owners noticed both the good and the bad in the properties as well. The national market began to recover around May and advanced throughout the summer. Since the market became saturated with a higher-than-normal buyer base and limited properties, the demand created competition, which propelled median sale price increases.
Spring and Summer Momentum
Chicago used the spring momentum to push into a strong summer and fall market. From the Chicago Association of Realtors’, the market snapshot informed us that the lower market inventory allowed sellers to set higher prices and, as the summer months advanced, properties were on the market for a shorter amount of time. The closing sales in June were up 2.7% and July were up 2.1% from the year before. In August, Illinois Realtors saw record-high sales and prices, being matched with record-low interest rates. The Chicago Association of Realtors recorded the median sales price in Chicago was $335,000, up almost 16% from last year.
Infographic Courtesy of Chicago Association of REALTORS®
As we step into fall, September had more high-sale prices, in line with the national median asking price increases. The typical home spent 54 days on the national market in September, 12 days less than last year, and three days less than last month. The Chicagoland area saw properties only spending 42 days in September, seven days less than August. Plus, we are halfway through October and, currently, the interest rates are at the lowest rates ever reported with Chicago’s rates hovering around 3% for a 30-year mortgage.
The Positive Outlook
With winter right around the corner and based on the market stats, Chicago’s housing market does not seem to be freezing with the oncoming snowy months. The winter presents more benefits than one may think about during Chicago’s harshest season. A buyer can experience a potential home exterior without the extra fluff of foliage while also getting a feel for the interior during the cozy holidays. If a seller wants to drop the price simply to sell a property, buyers have the opportunity to grab a winter housing deal. Another advantage is that the IRS allows year-end homebuyer tax exemptions and breaks on mortgage interests, mortgage insurance premiums, and property taxes. If a new property owner wants to file for homeowners’ exemptions on a principal residence, the owner must acquire the property before January 1st of that year or wait until the following year to receive the exemptions.
The Bottom Line
As long as there continues to be a healthy level of properties on the market, the market will continue to stay strong well into spring. Whether you have property to sell, are a buyer on the search, or are a realtor ready to lend their expertise, do not let this winter real estate season slip away from you. Start your search today and be on the lookout for some good housing deals on the market during this Chicago winter.