What trends are shaping the 2018 real estate market in Chicago? In the first half of the year the number of foreclosure sales dropped, and the sale of new construction was down. But homebuying activity is still hot in specific neighborhoods and suburbs. 

July Was a Comeback Month

In July, home sales were up 1.1 percent compared to last year, according to a Crain’s Chicago Business report based on Illinois Realtors data. This represents an improvement over June, during which sales in the city dropped 8.7 percent in Chicago and 7.3 percent in the nine-county region. The median sale price of a home in Chicago also increased to $309,000 in July, up 3 percent from last year.

The Sale of New Homes Dips

In the first quarter of 2018, the purchase of new homes in the Chicago area was down 17 percent compared to the same period last year, according to Crain’s Chicago Business. The sale of new homes in the second quarter bounced back with a 5.3 percent increase compared to the same period last year. Overall, sales of new homes were down 7 percent in the first half of this year. Homebuyers bought a total of 2,323 new homes in the first half of last year compared to 2,161 new homes in the first two quarters of 2018, according to the report. 

Erik Doersching, executive vice president of the Schaumburg-based real estate consulting firm Tracy Cross, told Crain’s the price of buying land and building a new home drives up the cost new construction while the value of existing homes is rising slowly following the market crash. Buyers are left looking at a larger price gap between existing homes and new construction, which could account for the drop in sales, the report points out.

Distressed Home Sales Drop

While the sale of new homes may have slowed, the market hit a positive milestone in July. The number of distressed homes (including foreclosures and short sales) dropped to its lowest point since January 2008, according to Crain’s Chicago Business. In January 2008, distressed homes accounted for approximately 9 percent of home sales and that number steadily increased as the housing crisis continued, hitting 40 percent in December and more than 55 percent of Chicago home sales in February 2012.

This July, just 4.9 percent of Chicago home sales were of distressed homes, Crain’s reports. A total of 2,776 homes were sold in the city in July. Of those homes, 103 were foreclosures and 34 were short sales, according to the report.

"Filings are down to 2000 levels, pre-crisis levels," Geoff Smith, executive director of the Institute for Housing Studies at DePaul University, told Crain’s.

The report shows foreclosure sales were higher in some neighborhoods, including Englewood and Burnside, which were highly affected by the housing crisis.

Homes in Humboldt Park

Prices on the Rise in Humboldt Park

Home prices in Humboldt Park increased 45 percent compared to last year, according to Chicago Association of Realtors data pulled by Crain’s Chicago Business. The median sale price of a home in the neighborhood is $196,750, compared to a median sale price of $136,000 last year. In the first half of this year, homebuyers snagged 92 homes in the neighborhood.

In the past, Humboldt Park has been overlooked for its more popular neighbors, but the popularity from places Logan Square is spilling over into the neighborhood. In fact, Humboldt Park had a bigger jump in home sale price than Logan Square. The median sale price in Logan Square increased only 16.5 percent compared to last year, according to the report.

The report predicts Humboldt Park’s proximity to other hotspots, plus amenities like a sprawling park and access to The 606 trail, will likely mean a continued rise in prices.

Hot Suburban Markets

Crain’s Chicago Business released its list of hot suburban real estate markets, and more than 30 of Chicago’s suburbs met the criteria (more homes selling faster and at a higher median price). Suburbs, such as Brookfield and Darien, improved in all three categories compared to last year. Other suburbs, like Dolton, benefited from the attention of home flippers and rehabbers, according to the report.