Evanston Illinois and Chicago real estate listings, home buying, selling and relocation information

Suzannah is more than a great realtor. She is trustworthy and patient. She goes out of her way to make her clients' dreams a reality, well beyond the closing table. Suzannah comes highly recommended and regarded by very satisfied clients.
--Beth & Andy

Market Analysis: August, 2011

Wouldn't it figure that JUST as consumer confidence was beginning to rally in the world of real estate (I mean, really, what a tremendous summer we had), the bottom had to fall out of the darned stock market. Again. And wow, gold is getting expensive (another bubble--mark my words). So where is the average American to put his or her money, I ask you? Well, stocks would be the obvious answer if we weren't all so gun shy. T-bills are a little beyond the scope of a layperson's purview. To illustrate, I know nothing about them. So real estate is suddenly looking like a not-so-horrid place to park some money. Perhaps not all of it--after all, diversity is the key to investment success--but really, with rates at historic lows (and the fact that there's a lot more satisfaction in touching real estate than there is in stock certs) there's simply no reason not to jump in.

Buy! Buy! Buy! But only sell if you're rolling up....More on this later.

So. Evanston has had a mind-blowing summer, real estate wise. Just when I'd made my summer vacation plans--counting on a lull, you know--the joint started jumping. For the first time in my selective memory, July was a STRONGER month for contracts than June. I will repeat: JULY SOLD MORE EVANSTON HOUSES THAN JUNE. Maybe only a few, but still. We were at 130%+ from July of 2010 for contracts on single family homes. Condos, not unexpectedly, did not fare quite so well, but still squeezed out July 2010 by a small margin. And August, to the extent the MLS is current, is promising to be pretty amazing too. So hurrah, the market LIVES.

Absorption rates, or the number of months current inventory can withstand the average monthly contract rate, are hovering around FOUR months for single family homes for everything but the entry level (under $200k, which is at about 6 months of inventory) and the long-suffering luxury end (with 10 months for $1.25m=$1.5m and then an obnoxious 27 months for above that). There is a blip in the $900k-$1m range but even that is only at 8 months. This is the healthiest we've ever seen the single family home market since the heyday of 2005-2006.

Condos are a little more all-over-the-map with respect to absorption rates. The lower end (up to $250k) is oversupplied with around 11 months of inventory (which still isn't AWFUL). The upper end is actually undersupplied, with only 4 months of inventory left between $650k-$750k. Everything else averages around 7 months. When we consider that 4-6 months of inventory is considered a "healthy" market, them's not bad apples.

Interestingly, market times are trending back up again, for both condos and houses, and by a lot. We saw an increase of about 90 days in market time for both types of housing. So things that are selling have been on the market a while, and that's actually a great indicator that as inventory is decreasing (and asking prices fall over time), we are moving some of the "staler" homes that have been on longer. We need this desperately.

Investors are out in force again, sharking at any blood they smell in the water. Which is fine, at least money is driving back into the market and that should send signals to the rest of us that it's a good time to invest. Again. With care and caution, of course, and with the understanding that the horizon for appreciation of any kind is going to be about five years, in my estimation. So buy and hold and enjoy.