The Chicago area housing market is once more a safe place for sellers.
The Illinois Association of Realtors said Wednesday that Chicago-area home sales and median prices rose in July amid a sharp decline in available properties.
In the nine-county Chicago region, sales in July rose 36.1 percent from the same month last year to 11,897, the Realtors said. The total includes single-family homes and condominiums and was the highest monthly figure in seven years, since before the housing crash.
“This is what a housing recovery looks like,” wrote an exultant Brian Wesbury, chief economist of First Trust Portfolios, in a report reacting to data that also showed home sales up throughout the country in July.
Other analysts, however, still express caution. An increase in mortgage interest rates of about 1 percentage point from historic lows over the summer could slow the market, some believe.
It’s also possible that rising prices will bring out the sellers.
“This will bring more homes onto the market but could lengthen the time some of those homes sit, especially if they are not turnkey properties. Investors are still seeking deals,” said Diane Swonk, chief economist at Mesirow Financial Holdings Inc.
The Realtors said the area’s median sales price in July was $201,075, up 18.3 percent from the prior year.
Meanwhile, the inventory of homes for sale was off 34.9 percent over the same period. Experts said the lack of supply supports higher prices, with buyers looking hard for what they want and then finding that desirable properties are getting multiple offers.
“The inventories are so low that there’s really no place for prices to go but up,” said broker Leigh Marcus of @properties. Marcus works Chicago neighborhoods from the South Loop to Rogers Park, and he reports brisk sales and bidding wars for homes with attractive features.
He handled such a sale in July for Joe Chasen, an options trader at the Chicago Board of Trade. Chasen said the Bucktown rowhome sold in three days and drew a strong response because of features such as a yard and rooftop party space.
Marcus said it sold for $861,500 and that six offers were made, all above the asking price.
Chasen said he bought a house in Glenview before selling in Bucktown and had to beat out other bidders. “I think I hit the market at a good time, just before interest rates began to tick up,” he said.
Geoffrey Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois, said the numbers point to a “sustained housing market recovery.” His organization compiles the data for the Realtors.
Within the city of Chicago, sales in July rose 31.1 percent to 2,838, and the median price was up 25 percent to $250,000, compared with year-ago data.
A check of suburban data furnished by the Chicago Association of Realtors showed substantial increases in many larger towns for both sales totals and median prices in July.
Active Cook County markets included Des Plaines, Niles, Park Ridge and Streamwood in the northern suburbs; Brookfield, Maywood and Melrose Park in western suburbs; and Calumet City, Lansing and Orland Park in southern suburbs.
In the collar counties, home sales and prices registered substantial gains in Bolingbrook, Downers Grove, Gurnee, Naperville and many smaller communities.
Realtors said buyers are exhibiting greater confidence about the economy and their job prospects.
“The market is starting to come together, especially in the condo arena that was hard-hit across most areas of the city,” said Ezekiel “Zeke” Morris, president of the Chicago Association of Realtors and managing broker at Keller Williams Realty.
But there are different opinions on the impact of slightly higher mortgage rates. Local interest rates on a 30-year fixed rate loan average at around 4.5 percent, vs. about 3.5 percent in May.
Marcus said the higher rates are just now having an effect. He said he detected a slowdown in sales starting in August beyond the typical impact of vacations and back-to-school preparations.
Wesbury, however, said the market will take the rates in stride. He said that with more confidence in place, “buyers are more willing to buy than back when rates were lower but buyers thought home prices might fall further.”
The Realtors’ Chicago-area data include the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.