Home sales plummet in June in 12th straight down month

July 23, 2019 10:19 AM 3 HOURS AGO

Crain’s Chicago Business

The double-digit drop in Chicago and in the nine-county metro area was far larger than the dip nationwide.

 

With a double-digit plunge in home sales in June, the Chicago area’s housing market reached its 12 consecutive month of declines.

In Chicago, 2,766 homes sold in June, 13.3 percent below June 2018, according to data released by Illinois Realtors, the statewide trade group.

In the nine-county metropolitan area, 12,002 homes sold, down 11.6 percent from a year earlier.

The local declines were far steeper than the national dip. Nationwide, home sales fell 2.2 percent in June from a year ago, according to data released separately by the National Association of Realtors.

Speaking of the national dip, NAR’s chief economist, Lawrence Yun, said in comments released with the national data that “Either a strong pent-up demand will show in the upcoming months, or there is a lack of confidence that is keeping buyers from this major expenditure.” He said it’s “too soon to know how much of a pullback” is related to the reduction of homeowners’ property tax deductions in last year’s tax reform package.

In prepared comments released with the Illinois Realtors data, Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois, also suggested lack of confidence in the economy is helping suppress home sales.

“The increase in apartment rentals and declines in consumer sentiment indices suggest that many potential home buyers are sitting on the sidelines, no doubt influenced by concerns about trade conflicts and the future growth of the economy,” Hewings said.

Property taxes are a factor, Chicago Association of Realtors President Tommy Choi said in the Illinois Realtors release. “We can’t escape the topic of tax increases right now,” Choi said, “and prospective buyers are paying attention.”

High property value assessments in north Cook County—which is being reassessed in the first year of a three-year cycle that will cover the entire county—coupled with “tax increases expected in 2021, has made some leery,” Choi,a broker at Keller Williams Chicago, said in the release.

While both the Chicago and metro-area figures were bigger than recent months’ declines, they were not the first double-digit drops in the past year. City sales were down by double digits three other times in the past 12 months (March, December and September), and twice (December and September) in the nine-county area.

Year-to-date at the end of June, home sales in the city totaled 13,155, a decline of 7.7 percent from the first half of 2018. The nine-county sales total was 53,675 for the first half of the year, down 6.8 percent from the same time a year ago.

The median price of homes sold in June was up slightly from a year ago.

In the city, June’s median sale price was $319,900, up 1.6 percent from June 2018. In the nine-county metro area, the median price of a home sold in June was $263,000, up 0.2 percent from a year ago, or essentially flat.

Year-to-date median price comparisons are not available in the Illinois Realtors report.

Nationwide, the median sale price in June hit an all-time high of $285,700, up 4.3 percent from a year earlier. It was the 88th consecutive month of price gains, NAR reported.

The Chicago area’s 12-month stretch of sales declines is the second-longest lull locally since the housing crash. Sales were down on a year-to-year basis every month in a 13-month series that ended in July 2011.

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