Chicago Housing Bubble

Quarter 1 is over. What did we learn?

After a few too many drinks on Saturday afternoon, I got curious about how our 2010's Q1 compares with 2009's Q1. And here's what I found:

I looked only at 4 neighborhoods. And this is condos only (not enough SFHs or 2/4 flats to get good numbers). Here's the bulletpoints:

• closings are up 64%
• prices are down 1.4%
• market time is down 14%

Is this the bottom? Well, we don't know yet. The pesky tax credit expiring will continue to skew the numbers through the end of June. Looking at the number of contracts written in May/June versus 2009 should be an interesting exercise. We'll have a good idea about what will happen next when we see those numbers.

 

Crains reports the Case-Shiller numbers for January

The Case-Shiller report was released yesterday, and the news is not good for real estate in Chicago. Bottom line, we lost 4.7% since last January (in prices), and we lost almost 1% since December.

And... of the 20 cities measured, Chicago fared the worst.

January was a slow month for me personally, but as the credit thing has warmed up the buyers market, things are starting to get a little nuts. April is going to be insane.

Albany Park's market is completely insane (WOW)

I happen to have a listing in Albany Park right now. It's a 1 bedroom, 1 bath condo with washer/dryer and an exceptionally well-run association.

ANYWAY - I was doing a check-in with my client about her listing and trying to figure out a strategy for our next steps. Before dropping the price, my client asked me a great question: "Since listing- have there been any one bedrooms that have sold in Albany Park?  If so, at what prince?"

So I looked it up. And here's what I found:

There have been only 2 listings in Albany Park that have moved this year so far. One is pending, the other is closed. Here are the details:

Unit 1: a 1/1 foreclosure that SOLD at $47,000

Unit 2: a 1/1 short sale PENDing at $65,000 list price.

I did NOT expect that! I sell a lot of real estate and keep my finger on the pulse of things. But I was flabbergasted that THIS is all that has moved in one full quarter in Albany Park.

WOW.

North Center 2009 market results

Here are the 2009 market results for North Center.

Post questions or thoughts in the comments section if you have 'em.

The January condo results are in.

What will 2010 hold for us? It's tougher to say right now than it was at this time last year. There are 2 factors that are artificially propping up the market:

• super-low interest rates
• the $8000 closing cost credit

Not until these 2 things are gone will we know how the year will shake out. Until then, here's what we DO know so far:

Analysis: closings were down over 25% in 2009. That is the reason for the continued translation to lower prices. It should stay this way until we see a SUSTAINED improvement in contracts and closings. "Sustained" is the key word. It will be interesting to see what happens to the market when the Fed buyback of bad loans AND their housing credits both expire. Until then, things look artificially good right now.

Lincoln Square 2009 market results

OK. Back at it. I'm going to be posting 2009 market stats for all the neighborhoods on the northside. Forthcoming:

• Lincoln Park
• Lakeview
• Uptown
• Edgewater
• Lincoln Square
• North Center
• Logan Square
• Albany Park
• Irving Park
• Bucktown/Wicker Park
• South Loop
• West Loop

To start... here are the Lincoln Square results* - including condos, single-family homes, and 2-4 flats.

* You might notice that we hold Lincoln Square to Western on the west border. Don't yell. In my experience, this is how buyers shop. If you want numbers for further west, let me know...

Your wish is my command

As requested by "Chris" about the first week of the year stats, here is some additional information about the contracts written for condos on the northside. 

Not much to see here, but I was happy to have done the analysis anyway. So far the only notable statistic is the number of contracts. Oh - and in case you're wondering why the 2010 number is 79 today and 76 yesterday - it's because sometimes contracts that were written on 01/07 don't get inputted into the MLS for a couple days. 

(This is also the reason I wait until about 10th to post the previous month's stats)

And in case you're wondering where the single-family home data is - I did this additional analysis ONLY for condos because the single-family home numbers are just too darn small.

2010 Chicago real estate (so far)

Are you wondering yet about how the northside market is going to look in 2010? 

Here's the (very) early returns:

Obviously not much to talk about in the SFH box. But condos?

Wow?

Maybe wow. We'll see...

Single family homes through 2009!

Single-family homes are a little less interesting and predictable than condos from a numbers perspective. This is due mainly to the fact they don't exist in large closing numbers. The turnaround time for families in a single-family home is longer. And they take up more overall space. This leads to fewer transactions on a yearly basis.

Regardless, it's nice to look at the data and spot some trends. You'll notice I pulled out some of the neighborhoods that aren't really "single family" neighborhoods. South Loop, Near North, and West Loop are missing on purpose. Uptown really should have been pulled as well.

First, the sales numbers...

The only notable thing I can spot is the Irving Park numbers having gone up 18% in 2009. What you can't see is that 46 of those 139 were short-sales, foreclosures or court-approved sales. So while the transactions were up 18% from the year before, if you take out the distressed properties, it was actually down 21%. More on distressed properties next week...

 

Prices get even weirder in the numbers (especially without digging into the number of bedrooms). From cutting data obsessively for the past 18 months in all the northside neighborhoods, I can say (with confidence) that if you bought a home in 2005, it's worth less today than it was then. The numbers in every neighborhood here reflect it. And hey - Uptownites - don't read too much into your neighborhood's "positive" numbers - 21 total sales is too small a sample to get an accurate read.

Meanwhile, my favorite head shaker is Lincoln Park. No matter how I cut the data, how far I go back, how many bedrooms I use - LINCOLN PARK single family homes will not quit! The Lincoln Park SFH market just keeps going in the right direction.

Post comments if you have them. Meanwhile, there's more to come this week and next.

West Loop, Ukranian Village, Wicker Park and Bucktown in 2009 (so far)

I met with a client last week who will be shopping in a few different neighborhoods in the new year. And as part of the... uh... let's call it "discovery process", he wanted to see some statistics on the market in those neighborhoods.

Considering the fact I haven't posted in nearly a month and that I have some fresh stats, I thought: "What the hell, stop being a jerk and put those stats up on that super-awesome site of yours. I mean, this content can't write itself. It needs your brilliant mind."

First things first - transactions...

My guess is that you're smart enough to ask the question: "How is 2009 relevant if it isn't over yet?" Well, it's relevant to me because December will not produce more than about 7-9% more closings (at most). In the West Loop, that would account for just 18 more closings (again - AT BEST) and drop the transaction loss from 2005 to 34%. Bottom line - the market took a huge hit in number of sales this year.

And yes - it took a big hit DESPITE the homebuyer tax credit that expired and was then renewed at the end of November.

Moral of (this part of) the story: the homebuyer tax credit extension will not turn the market on a dime in 2010.

On to prices...

We did start to see some Q3-Q4 price improvement in 2009. By improvement, what I mean is that the bleeding seems to have stopped (for now). Here's the picture...

For the CHB un-initiated, we measure 2/2's here to get a good thermometer of the overall market. You might be buying/selling a 3/2 or a 1/1 or a studio or coachouse or whatever... but the trends will be similar. If you bought in 2004/2005, in almost EVERY situation, you're likely down on price. But the picture might be a little better than it was earlier this year.

So what's next? We'll have to see some January/February numbers to start to get a picture for what will happen in 2010. My analysis: we'll not see any price improvement in 2010, and if transactions continue to fall on the northside, we'll continue to LOSE VALUE in 2010.

But my guess is - we're at the bottom. That's right folks, my VERY EARLY PREDICTION is that we're at the bottom of the northside Chicago housing market. And we're going to be sitting here on the floor for a while.

I can't wait to see what happens next :-)