How Oversupply Of Homes Is Affecting Chicago Real Estate Sales

ILLINOIS — New residential real estate listings in Chicago make it a buyer’s market, according to a recent report from the online real estate company Redfin.

Overall, U.S. home-sale prices hit a record $396,500 during the four weeks ending June 15, up 1.1 percent year over year, the Redfin report said. That’s in line with price increases over the past several weeks, but prices are down about 5 percent since the start of the year.

Chicago saw the second-highest year-over-year increases when it comes to pending sales in the United States at 5 percent.

Redfin said a historic imbalance of sellers and buyers — there are 500,0000 more houses on the market than people to buy them — has created an atmosphere where sellers are open to negotiating.
The median asking price was $422,238, but the median sale price was roughly $26,000 less, the report said.

New listings of homes for sale are up 4.4 percent year over year, and total listings are up 14.5 percent. Meanwhile, pending sales are down 1.5 percent year over year, and mortgage applications are down 3 percent week over week, an indicator that buying a home remains out of reach for many potential buyers because prices are so high, Redfin said.

“I’m explaining to sellers more and more that we need to be strategic in our pricing strategy because homes that are overpriced, even slightly, are likely to sit on the market and invite buyers to negotiate,” said Kelly Connally, a Redfin Premier agent in Tulsa, Oklahoma.

“Pricing is most important, but with fewer buyers than usual out there, sellers should also make sure their home is in excellent condition and be ready to make repairs upon inspection,” Connally said. “There are a few exceptions: Homes in desirable locations that are in perfect condition are still hot and typically sell at or above asking price.”

Redfin said the mismatch between supply and demand is likely to lead to a nationwide decline in home-sale prices by the end of the year.

Metros with the biggest year-over-year increases in the median sale price were Philadelphia (5.5 percent); New Brunswick, New Jersey (5.4 percent); Pittsburgh (5.3 percent); Nassau County, New York (5 percent); and New York City (4 percent).

The biggest decreases in median sale prices were in Oakland, California (-5.9 percent); Jacksonville, Florida (-3.9 percent); Dallas (-3.1 percent); San Diego (-2.4 percent); and Atlanta (-2 percent).

Metros with the biggest year-over-year increases in pending sales were Cincinnati (5.2 percent), Chicago (5 percent), Dallas (4.1 percent), San Francisco (4 percent), and Columbus, Ohio (4 percent).

The biggest year-over-year decreases were in San Jose, California (-18.5 percent); Fort Lauderdale, Florida (-15.5 percent); Las Vegas (-14.9 percent); Miami (-14.6 percent); and San Diego (-11.1 percent).

Metros with the biggest year-over-year increases in new listings were Warren, Michigan (14 percent); Cincinnati (13.7 percent); Columbus, Ohio (11.3 percent); Cleveland (10.3 percent); and Indianapolis (9.5 percent).

Those with the largest year-over-year decreases in new listings were Tampa, Florida (-11.5 percent); Orlando, Florida (-8.7 percent); Jacksonville, Florida (-7.2 percent); San Jose, California (-7 percent); and Atlanta (-6.6 percent).