Chicago Housing Bubble

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 :-)

Single-family home prices

As promised, here is some information on how single-family homes have been faring since the "peak" year of 2005...

Any decent statistician knows that you need really big numbers to find reliable trends in the numbers. Single-family homes don't sell at the rate that condos do, so the margin of error is a little bigger with these numbers. Don't take that to mean that this isn't useful information - it is. It's just a little less perfect a science as condos are.

A couple things to note from this:

• Lincoln Park's peak is THIS year (so far). Either Lincoln Park will see a big drop off OR the market there is stable/efficient enough to see through the market change. It's my opinion (and this applies ONLY to Lincoln park) that it's the latter. I think Lincoln Park's luxuryish market and level of big-money desirability will always keep it relatively stable. I just don't see any big swings coming in Lincoln Park's single-family home market.
• Bucktown/Wicker Park and Uptown both show upticks from last year's median home prices. If you take that to mean you can sell your house easier in those neighborhoods this year versus last year, you're smoking crack. Seriously - get off the crack. These numbers come from a small sample (84 in Bucktown/Wicker Park and 15(!) in Uptown). Don't put too much faith in this report's ability to predict saleability in those neighborhoods. And DEFINITELY don't raise your price. Because you won't sell.

My next post is something I've been wondering for a long time - are people starting to buy smaller houses? I'll be reporting tomorrow on the average number of bedroom/bathrooms in single-family homes since 2005.

Condo closings through 09/30 (or: "Where's the bottom?")

I found myself in a long discussion with a colleague yesterday in which we were trying to figure out what was going to be happening in the market in the next 6 months or so. We disagreed about one point: are we at the bottom, or are we not?

This led to many theoretical followup questions that centered around this theme: how do you know if it's the bottom or not?

I tend to think it has something to do with transactions. For instance, the number of people buying and selling homes will hit a "normal" point based on factors like population growth, employment rates, interest rates, etc.

So my SIMPLE theory is this - the last time we were in a "normal" market on the northside, it was the mid-90's. And population in Chicago has been stagnant since then. So if the number of closings in a year starts to look like it did in the mid-90's, we MIGHT find ourselves in a "normal" market.

Here's what the numbers look like:

I used 1996 because I felt like it. But you can do your own comparisons. The encouraging interesting thing about this is that 4 neighborhoods have dipped below that "normal" line:

• Uptown
• Edgewater
• Lakeview
• Lincoln Park

This could mean one of 3 things:

1. Things are going to stabilize very soon in these neighborhoods
2. Those markets are due for a rebound and the time to buy there is now
3. I have no fucking idea what I'm talking about and the future is impossible to predict

Take your pick.

Single-family home coverage is up next...

Condo numbers through 07/31

I haven't posted numbers since the end of June. I was tracking every 15 days. This time we have a lag of a month. So sue me.

I decided to present a more simplified look at the numbers so you can see how we're doing through-07/31 in 2 categories:

• Closings - the number of closings that have occurred through 07/31
• Contracts - the number of contracts written through 07/31

For those people who love to say "well - MY neighborhood is different", I broke it down by neighborhood...

Overall, the northside is down 43% in closings and 30% in contracts written.