The COVID-19 pandemic has had an impact on every aspect of the economy, and that includes the real estate market. This spring, Chicago’s market, like many others around the country, was basically shut down, leading many to question how the rest of the year was going to play out. Thankfully, once Chicagoans adjusted to the new reality, home sales rapidly picked up.
June 2020 saw a 21% increase in home sales over the same month last year. This trend repeated for July (36% more than last year) and then continued through August and September. Another key indicator of the stability of the real estate market is median home prices. Home prices did not go down in Chicagoland in 2020 over 2019, indicating sufficient demand. In fact, prices in certain neighborhoods are up as much as 15% over last year.
One interesting factor in 2020 has been that fewer homes were listed. Chicagoland home inventory in September 2020 totaled 40,047, a 35.8% decline from 62,406 homes in September 2019. This could be because homeowners are less willing to show their homes to strangers during the pandemic.
The real estate market has been helped by interest rates, which are yet again at the lowest they’ve ever been. Many homeowners are qualifying for rates as low as 3% on a 30 year fixed mortgage, which for many is a deal that’s just too good to pass up.
What will 2021 bring? As usual, it’s impossible to say. With the pandemic not showing any signs of letting up, but with a vaccine reportedly on the way, the market could play out in a variety of ways. Supply will almost certainly be on the lower end again, but it’s hard to predict if homebuyers will still be eager to take advantage of low rates, or if other negative economic indicators could put a damper on homebuyer demand.
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