By Chris WomackChicago real estate is a good thing.
In this year’s home buying frenzy, it’s also a good bet.
That’s the takeaway from the latest data from the U.S. Census Bureau.
Home sales in Chicago surged 11.5 percent from a year ago, according to the latest Census Bureau data released Tuesday.
That marks the biggest increase since January 2018.
That year, home sales in the city hit a record high of 1.8 million units, and the city saw a surge in demand for rentals.
That was the first time the city had seen a surge like this since 2013.
“This year we saw a massive uptick, and we’re just now beginning to see the market rebound,” said Andrew Gaffney, a senior economist at Markit and co-author of the report.
“It’s still a good time to buy.”
Gaffney said Chicago’s housing market has been a strong performer in recent years, thanks to strong economic growth and a strong housing market-wide inventory.
The housing market in the country’s second-largest city has seen an average annual growth rate of 5.4 percent, and that’s up from a 4.5-percent growth rate in 2016.
But the pace of housing sales has been sluggish.
The Chicago Real Estate Board, which collects data for the bureau, noted that while the nation’s median price of a home hit a new all-time high of $2.4 million last year, prices for homes in Chicago hit a 30-year low of $1.2 million.
That means that average sales prices in Chicago last year were less than $200,000 less than they were in the early 2000s, when the city was still seeing a boom in the housing market.
“I think that’s what we’re seeing in Chicago is that people are starting to feel the pain of the recession, and they’re starting to recognize that their home is not a good investment,” said David Schindler, chief economist at CBRE.
“So we’re starting at a disadvantage in terms of inventory, and I think we’re in that stage now.”
Gaining groundGaff, however, said that while sales in housing are up across the country, they aren’t as strong in Chicago as in other markets.
That could be because Chicago’s population has been growing at a slower pace than the rest of the country.
In the first quarter of 2019, the city recorded 682,000 new residents, up from 521,000 a year earlier.
That number was up from 550,000 in the first three months of the year.
That growth comes despite the fact that the city has experienced a sharp drop in its population in the last decade.
Chicago saw a 9 percent drop in population from 2005 to 2018, and by 2020 it’s projected to lose nearly half its population, or more than 9 million people.
Chicago’s median household income was $57,927 in 2019, down $5,200 from the year before.
And the median price per square foot of homes sold was $1,542 in 2019.
Gaff said that in addition to the housing-related weakness in the market, there’s another factor that could be weighing on sales.
While the national median income rose to $50,200 in 2018, it fell to $53,700 in 2019 and is forecast to remain below that level in 2020.
“We are seeing a real, real drag on the housing stock,” he said.
“The problem is that the inventory isn’t growing as quickly as it was, so we’re still in a very competitive housing market.”
Schindler pointed to a recent survey of more than 50,000 mortgage lenders by the Mortgage Bankers Association as evidence that the housing crisis isn’t just affecting homeowners.
That survey found that homeowners in Chicago are still making payments on their homes at a higher rate than in any other major city in the U, with the median monthly payment in the Chicago metro area at $1 (or $9,000) a month.
The real estate industry has been slow to acknowledge the severity of the housing recovery.
The National Association of Realtors, which represents the real estate trade group, said in an email that the national recovery has been “slow, but real.”
“The national recovery is not fully complete and it is still ongoing, and is far from complete,” the group said.
The group pointed to housing sales and the weak U.N. GDP data as evidence of the continuing weakness of the U-20 economy.
That weakness has also put pressure on homeowners in other parts of the nation.
In addition to Chicago, several other cities, including Los Angeles, Phoenix and San Francisco, saw home sales decline this year, and a few metro areas, including San Diego, were seeing home sales drop.
Still, the nationwide decline in home sales is still encouraging for home buyers in Chicago.