Chicagoland real estate market tips even further in favor of sellers
Chicagoland home sellers gained an even greater advantage last month as demand from home buyers continued to grow, housing supply continued to shrink, and average market time accelerated.
Area single-family homes are spending an average of 10 days less on the market this year as compared to 2021. So far this year, detached homes are averaging 29 days on the market as compared to 39 days as of May 2021, a 25.6% decrease.
"Clearly, we're in an extreme seller's market with historically low inventory and high buyer demand," Mainstreet CEO John Gormley said. "If a seller is ready, now is the time to list." Gormley added that over the last two years, Mainstreet has targeted its consumer marketing efforts toward sellers in an attempt to free up supply and drive toward a more balanced market.
MLS months supply of inventory (MSI) reached a historic low of 1.6 months in May 2022, down from 2.4 months one year ago and 4.0 months in May 2020. This metric calculates how many months it would take to burn through every home currently for sale if new homes stopped listing, quantifying the relationship between supply and demand. It hit its lowest point since 2008 this May.
"Buyers are facing fierce competition and don't have the luxury of time," said John LeTourneau, Mainstreet Board of Directors President. "As a buyer, it is critical to work with a REALTOR® to make sure your financing is in order and you are ready to move quickly on a home."
Home prices continue to rise alongside shrinking inventory and growing demand, making this an even more challenging time for buyers. The detached median sale price in Chicagoland was $365,000 last month, a 7.4% increase from May 2021.
Still, according to Gormley and LeTourneau, today's hypercompetitive market shouldn't dissuade buyers who would otherwise be ready to make a purchase.
"Investing in the stock market is still far more volatile than investing in real estate, as we were reminded when stocks fell into a bear market in June," LeTourneau said.
"Mortgage rates are still going to continue to rise," Gormley added. "The longer you wait, the more expensive it's likely to get. Over the course of a 30-year mortgage, there are still great financial upsides to buying a home, even in this market."
The following suburbs saw some of the sharpest decreases in average days on the market for single-family homes in May: Addison (84.5% decrease in average days on market); Antioch, (-79.5%); Homewood, (-62.1%); Hinsdale (-70%); Hoffman Estates (-71.4%); Lemont (-66.7%); Mt. Prospect (-60.7%); Naperville (-56.4%); Oak Forest (-56.6%); Schaumburg (-45.8%); Sugar Grove (-89.1%); Vernon Hills (-89.3%); Western Springs (-72.6%).