We couldn’t help but feel a pang of sympathy when BuilderOnline reported the data difficulties being had by the Illinois Association of Realtors.  It can be a challenge when you’re looked to as a source of reliable information and someone makes a mistake.  In the end, with the help a local MLS affiliate, it sounds like they’ll get their pricing data corrected and revised.

But we also couldn’t help taking a look at the situation ourselves, because even with the corrected price figures, the limited scope involved still doesn’t tell the full story of Chicago condominium prices.   This isn’t unique to MLS-based price data; there are myriad local, regional, and national data sources that typically provide an incomplete view of the market in one way or another, and finding all the information in a single source has always been near impossible.   We’ve worked very hard to change that through our Housing IntelligencePro platform, and so we thought this was a good opportunity to share what we see in the city of Chicago in terms of condomiumiums.



Clearly Midwest Real Estate Data was correct in their assessment of the original erroneous reporting of May 2011 price data  by IAR, which put the median price near $300k, a level not reached since 2008 in terms of regular resale transactions.  Since then, prices have been steadily dragged down, and a big reason is the prevalence of distressed properties on the market. 



In January 2008, REO/Distressed closings only accounted for 5% of condominium transactions in the Chicago market, but by January of 2011, that share had risen to 35%, squeezing the new home market and dragging down regular resale prices.  Since January 2011 the number of such transactions has abated a bit although overall condo transactions have been in decline also.  But REO/Distressed properties begin with a home in foreclosure, so it’s important to look further back along that time line as well.

Between 2005 and August of 2010, the rate of foreclosure on condominiums in the city of Chicago has outpaced the rate at which they have been sold back into the marketplace as REO/Distressed closings in every month except for five.  That changed in September 2010, when that overhang of foreclosed inventory began to be reduced, and REO/Distressed sales have outpaced new foreclosures every month since except for a blip in March of this year.  Circling back to pricing, while more REO/Distressed means additional downward pressure on overall condo prices, in the long run it is good that the peak of foreclosure overhang appears to be in the past, and the Chicago condo market can now move forward with absorbing the remaining foreclosed inventory so that the market and prices can stabilize in the coming months and years.

We hope we’ve communicated the importance of viewing the larger picture here, and our goal is to help everyone in the industry get a more complete view of the housing market so we can understand what is going on, why it is occurring, and what steps need to be taken for a true recovery to take place.  For more information, please feel free to explore our website at http://www.housingintelligence.com

For detailed information on various housing market and economic indicators, please visit the following links: