Chicago’s housing market is cooling, with home sales falling 15% by 2022

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The Illinois housing market continues its correction to where it was before the pandemic, but aspiring homebuyers looking for the right time to jump into the market will have to wait and see, housing experts say.

While the annual median price of homes was 4% higher in 2022 than in 2021 statewide, prices and sales are now lower than last year around this time, with another drop in December, according to Illinois Realtors, a real estate industry association. good agents.

According to Illinois Realtors, median home prices in Chicago in 2022 remained the same as the previous year at $335,000. But in December, prices fell 8.1% compared to the same month in 2021. Home sales fell 41.2% year-on-year in December and 15% for the full year.

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While the drop in prices may be encouraging to potential homebuyers, the housing market typically slows down at this time of year. And with the potential for further rate hikes by the Federal Reserve on the horizon, housing experts are hesitant to make predictions for 2023.

“While the Illinois housing market has slowed since its peak in June, the decline is largely due to the usual seasonality in home prices and sales,” said Daniel McMillen, chief of the real estate department at the University of Illinois at Chicago. in a statement. “Our forecasts indicate that home prices and sales will rise as the housing market picks up in the spring.”

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Chicago residents looking to buy a home now will continue to face a tight market as inventory remains low due to sellers’ desire to hold onto their low mortgage rates. New listings in Chicago fell 35% year over year in December, according to Zillow.

The upside for potential buyers is that monthly mortgage payments on a home bought for about $300,000 fell 0.8% last month to $1,552, though they’re still about 58% higher than they were in December, Zillow data shows. Freddie Mac’s data this week has national rates for a 30-year fixed rate mortgage of 6.15%, down from the peak of 7.08% on Nov. 10, 2022.

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At the end of last year, Zillow’s data also shows that the share of homes sold above asking price fell to 29% and listings were on the market for about 33 days – 12 days longer than the year before, illustrating a decline in bidding wars.

Michael Gobber, president of Illinois Realtors this year, said the December results suggest the market is balanced in a way that could benefit both sellers and buyers.

“But it is much too early to predict the future because of the fluctuating economy and interest rates,” he said in a statement.

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