Chicago - Dec 2023 Market Update

Written By Tracy Lai

Hope everyone had a warm and lovely holiday weekend! This is the last market update of 2023 - this issue will contain December mortgage news, Chicago November Market stats, 2023 NAR Homebuyer and Seller stats, and local events.

Holiday lights at the Lincoln Park Zoo

 

Mortgage News

Mortgage interest rates fell to below 7% in December, as the US economy is seeing a deceleration of inflation rates. The Fed decided on December 13th to leave its benchmark interest rate unchanged and said that three rate cuts are likely to occur in 2024. As of December 22, mortgage interest rates were at around ~7.2%.

NAR forecasts in 2024 for interest rates to average ~6.3% along with stronger sales activity.

With lower mortgage rates, US home prices have increased. Total US housing inventory at the end of November was 1.13M units (-1.7% from October, +0.9% from Nov 2022), while median home price for all housing types was $387,600 (+4.0% from Nov 2022). All four US regions (Northeast, Midwest, South, West) have posted price increases. “Home prices keep marching higher,” NAR Chief Economist Lawrence Yun says, “Only a dramatic rise in supply will dampen price appreciation.”

 

Chicago November Market Stats

Good news for sellers in Chicago (or any homeowners interested in selling) - while number of closed home sales went down, the median sales price increased compared to this time last year, as well as last month

Year to Year numbers (YoY%)

Despite the number of home sales dropping in November to 1,415 total closed sales (-9.3% YoY), the median sales price increased+5.0% YoY to $323,000. The average market time for a home decreased by -7.4% since last November at 63 days on the market, and the inventory of homes for sale dropped to 5,260 homes, -24.6% from the inventory in November 2022.

Month to month numbers (MoM%)

Compared to October 2023: Total home sales of 1,415 in November dropped -12.7%; median price of $323,000 was in increase of ~0.9%; Average market time of 63 days was +10.5% longer; Inventory of homes for sale of 5,260 homes decreased by -10.0%

 

2023 Homebuyers and Sellers Stats

NAR published the Profile of 2023 Homebuyers and Sellers, some of the highlights include:

  • First-time buyers made up 32%, up from last year's 26%. This increase is still below the 38% average seen since 1981.

  • The typical first-time buyer was 35 years old this year, slightly down from 36 last year, while the typical repeat buyer age fell to 58 years from an all-time high of 59 years.

  • 59% of recent buyers were married couples, 19% were single females, 10% were single males, and 9% were unmarried couples. This is the lowest share of married couples since 2010.

  • 3% of buyers purchased a new home, and 87% of buyers purchased a previously-owned home.

  • 45% of recent buyers who purchased new homes were looking to avoid renovations and problems with plumbing or electricity

  • Buyers typically purchased their homes for 100% of the asking price, with 25% purchasing for more than asking price.

  • For 41% of recent buyers, the first step that they took in the home buying process was to look online at properties for sale, while 20% of buyers first contacted a real estate agent.*

  • 90% of recent buyers found their real estate agent to be a very or somewhat useful information source.*

  • Buyers typically searched for 10 weeks (unchanged from 2022 report) and looked at a median of 7 homes, and viewed 4 homes only online.

  • 80% of recent buyers financed their home purchase, up slightly from 78% last year, but still down from 87% in 2021.

  • The typical downpayment for first-time buyers was 8%, while the typical downpayment for repeat buyers was 19%.

  • 89% of home sellers worked with a real estate agent to sell their home, 7% sold via FSBO, and less than 1% sold via iBuyer.

  • For recently sold homes, the final sales price was a median of 100% of the final listing price, maintaining last year’s highest recorded since 2002.

Refer to the article to read many more interesting 2023 stats (link above)

*remember to use local real estate agents as a resource! If you are thinking of purchasing a home in the next year, or know of anyone selling a home, please send them this flyer and my contact information. I’m here to help 🙂

 

Local Events and Happenings

Still looking for NYE Plans? Here are 10 Great Ways for Chicagoans to Close out 2023

 

Thanks for reading, see you next year in the next newsletter!

Tracy

Tracy Lai
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Chicago - Nov 2023 Market Update