Condo prices in the Chicago metropolitan area were better in May than April, according to the newly-released Standard & Poor’s/Case-Shiller Home Price Index. The report revealed a month-over-month increase of 2.9% for condos in the city of Chicago and its surrounding suburbs. Prices for single-family homes also went up a tick (1.7%), which puts them at about May 2001 values.
Other potentially good news for Chicago’s condo market is the shrinking inventory of units. According to data compiled by one industry watchdog at ChicagoNow.com, the supply of 2-3 bedroom condos in Chicago is lower than it’s been in five years. This is partially due to owners pulling their listings off the market and renting them instead of trying to sell the property. With their condos in Chicago bringing in rent money to cover the mortgage payments, owners either rent larger homes themselves or, if they have enough cash for a down payment on a new place, take advantage of the low prices and purchase a move-up property.
Chicagoans who want to sell their condos in order to buy a bigger home have an excellent opportunity to upgrade right now. Single-family homes that were unaffordable during the real estate bubble are now available for the price of a condo in many cases. And, while it may not seem like an ideal time to sell a property, the flip side of selling low is being able to buy low. However, with so many condo foreclosures and bank-owned units on the market, conventional condo sellers are having to compete with distressed properties for buyers.
May’s price growth is positive news for Chicago’s condo market, but it remains to be seen whether longer term gains are on the horizon. Real estate experts expect to see some sort of improvement during the late spring and summer months as it is the traditional high season for home sales. There are typically more contracts written at this time of year and prices tend to inch up due to the increased demand. With home prices moving in the right direction as of May 31st, economists and industry analysts will be watching to see if this forward momentum continues through June, July and August.
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