The Chicago Real estate market managed a powerful start in 2021, with January recording the highest number of closings in 14 years. January 2021 reported a 17.1 percent higher closing than January last year, as the market strives to compensate for lost home sales during the early months of the pandemic.
A huge chunk of the increase in sales came from condos that have been falling behind until January 2021. Condo sales increased by 21.4 percent while sales of single-family homes rose by 6.0 percent. Shortage of single-family homes could be putting the sale of these homes on hold. What’s more, condos are still popular among some buyers.
An Overview of Chicago Real Estate market
Increase in Chicago Home Contracts
A substantial surge in home purchase contracts is a clear indication of an increase in closings. Chicago has reported 8 consecutive months of a substantial increase in home purchase contracts. In January 2021, for instance, contracts were 15.8 percent higher than the same month last year, meaning that closings are likely to increase for the following one or two months.
January set a 13-year record high for Chicago home contract activity. The closing average is currently running higher compared to late 2019 and early 2020.
Pending Home Sales
The Chicago real estate market has also seen an increase in the Pending Home Sales Index (PHSI). The number of homes awaiting closure recorded a 4-year high towards the end of January. Pending home sales increased by 462 units compared to last year. That increase will impact this year’s closing. Apart from leading to more current closings, the new contracts are also adding more future closings to the pipeline.
Distressed Home Sales
Thanks to the foreclosure moratorium in force, the percentage of distressed home sales has continued to drop. It was 9.1 percent in 2020, but this year, it’s just 3.2 percent.
Investing in Chicago Real Estate Market
Chicago’s housing units are occupied by both owners and renters. The most common housing units in this city are one and two-bedroom huge apartment complexes. Other common kinds of housing include rowhouses, single-family detached homes, and duplexes.
In the past decade, Chicago’s real estate market has recorded a 4.40 percent appreciation rate. Buying a rental property in this third-most-populous city in the nation could, therefore, be a worthwhile investment.
