Homes were flying off the market in Chicago this October due to the rising demand for housing, according to a new report from RE/MAX.
In October, homes stayed on the market an average of 83 days before finding a buyer. This is down a full week from last year’s 90 days, and the shortest average for October since 2005.
The shortened timeline is due to an increased demand for housing caused by the shortage of inventory in the metro. Inventory of homes for sale in October fell 10% from last year. This in turn reduced the total home sales by 5% annually to a total of 8,693 sales.
Not only are homes staying on the market for less time, but they are also selling at higher prices. The median sales price in October increased 9.5% to $219,000 from last year’s median sale price of $200,000.
“This is an outstanding market for those with a home to sell,” said Jack Kreider, executive vice president and regional director of RE/MAX Northern Illinois. “An average market time of under 90 days puts upward pressure on prices, and we certainly saw that play out in October.”
“The increase in mortgage interest rates since the presidential election will serve to reinforce the urgency homebuyers already feel, so we expect an active market right through the holiday season and into 2017,” Kreider said.
The home sales data used for the RE/MAX analysis is collected by MRED, the regional multiple listing service. It covers detached and attached homes in the Illinois counties of Cook, DuPage, Kane, Kendall, Lake, McHenry and Will.
The home price increase is good news for homeowners who are experiencing higher levels of home equity. In fact, 23.4% of all homeowners with a mortgage are now considered equity rich, an increase of 2.6 million from last year to 13 million in the third quarter, according to a report from ATTOM Data Solutions, a fused property database.
However, the obvious downside is for potential homebuyers, who are struggling to find a home at an affordable price. Home affordability is at the worst level in seven years, with 24% of the U.S. county housing markets less affordable than their historic affordability averages in the third quarter, the most recent ATTOM Data Solutions Home Affordability Index for third quarter 2016 recorded.
