The median sale price of a home in Chicago in February of this year was $272,000, a 10.6 percent jump from the median sales price of $246,000 in February of last year, according to Illinois REALTORS. The statewide median home price was also up in February, an 8.8 percent increase from $170,000 to $185,000. Here are three things to know about the city’s spring housing market. 

Home Prices Are Up, but Sales Are Down

Typical suburb of Chicago, IL

A total of 52 Illinois counties had year-over-year increases in median home prices, but home sales were down in many areas. In February, a total of 5,722 single-family homes and condos sold in the nine-county Chicago metro area, down 4.2 percent from the 5,971 homes sold in February 2017, according to the report. 

“In combination with shrinking inventory and concerns about affordability at the lower end of the price scale, year-over-year sales numbers are forecast to be lower than in 2017,” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois, according to the Illinois REALTORS report. 

Chicago is Dealing with Low Home Inventory 

Aerial view of Chicago suburbs, IL

Chicago has a competitive housing market that’s driving prices up. The city’s low inventory is a major reason for the competition. Buyers want to buy, but they need to act quickly, before someone else snaps up the home.

After the housing market crashed, a lot of investors bought distressed properties and made them into rentals rather than for-sale homes, according to the Chicago Tribune. Baby Boomers are opting to remain in their homes, instead of moving to smaller properties. Additionally, builders are slowly adding affordable homes to the Chicago market. Together, these three factors contribute to the city’s low inventory of homes available for sale, according to the report. 

In February 2017, there was a housing inventory of 53,522 available homes on the market. This February, the available inventory dipped 12 percent to 47,108 available homes, according to the Illinois REALTORS report. With the shrinking inventory, available homes are spending less time on the market. During February 2017, it took an average of 74 days to sell a home. This February, it took just an average of 71 days. 

Chicago Remains a Relatively Affordable Market

Homes in Portage Park neighborhood

While Chicago home prices are climbing, the city remains affordable compared to many other places across the country. To put a 10 percent down payment on a home in Chicago, you would need an annual salary of $64,948, according to Forbes.

Homebuyers need much higher salaries in other major cities, including: