Is Chicago’s House Market Starting to Turn?

We’ve all seen the past few years get upended by the COVID-19 pandemic, with housing market being affected dramatically. Labor shortages, supply chain issues, and inflation have caused many potential homebuyers to sit on the sideline due to significant price increases. This is especially true as of now with mortgage rates spiking leading to the overall cost of homeownership rising by upwards of 40%, compared with pre-pandemic levels.

One indicator that the points to the overall health of the housing market is total inventory. According to the St. Louis Federal Reserve, active housing inventory for sale in 2019 was roughly 1.2 million, meaning that over a million homes were for sale at any given time. Today, it is about 750,000, roughly 60% of what is was pre-pandemic levels.

When looking at data at the Chicago level, active housing inventory has seen a similar trend of consistent decreases year over year. Well, that data is finally start to shift. November was the first month where active housing inventory decreases in Chicago finally stopped. Year over year, homes for sale in Chicago was flat, meaning that about the sale number of homes are for sale now as there were last year in November.

Does this mean Chicago’s inventory issues is finally starting to shift, and we’ll see increases year over year going forward? Well, only time will tell, and as many of you know, the last few years have been anything but a market where once can make predictions. We shall see Chicago, but the data is finally showing some positive signs.