I recently read an article in the Chicago Tribune where it talked about the lack of inventory and how it was down from a year ago and how it may throw a spotlight on the appraisal process. This can carry many implications for future real estate trends so naturally, I was curious so I decided to take a look for myself.

The article talks about the broader Chicago real estate market but I decided to narrow my analysis down to Chicago’s Near South Side as it is very popular and active. I also decided to narrow the analysis to 2-bedroom condominiums, as it is the most common unit type for the market with 3,111 units sold since January 1, 2007.

During the busiest time of the year for real estate (May – October), the number of properties for sale was 56% lower than the number of closed sales during 2013 & 2014. Going into the 2015 busy season, active listings increased and closed sales decreased from this time last year. If the same amounts of buyers enter the marketplace in 2015 as they did in 2013 & 2014, they would be able to absorb the inventory. Let us see if there is any effect on the market.

Due to the uptick in active listings and downturn in closed sales for February – April 2015 the monthly average sold price is down in 2015 ($375,000) from 2014 ($425,000) and appears to be impacting the market.

While the market, in general, may be experiencing a shortage, some markets are experiencing an oversupply at this time which is increasing marketing time and prompting price reductions. If the ratio of closed sales to active listings doesn’t mirror trends from 2013 & 2014, prices will likely continue to go down. Couple this with talks of rates increasing later this year it will be interesting to see how this plays out.

Look out for my next blog in which this Chicago real estate appraiser will tell you the four things you need to tell the appraiser when you have a property under contract.

Do you want to know if there’s a shortage of homes in your market? Did I leave anything out or do you want to join the conversation on future real estate trends? Let me know in the comments below.

Providing real estate appraisal services since 1999 with an array of experience in property appraisals that includes Divorce, Estate, Bankruptcy, Tax Appeals, Pre-Listings, Pre-Purchase, FSBO and more.

Our coverage area includes Chicago and the bordering suburbs.

For more information call us today at 773-800-0269.

Thanks for reading,

John Tsiaousis