Sales prices of condominiums within the city of Chicago recorded a third month of year-over-year improvement in May, a small positive sign in a market that continues to struggle.
In May, the median price for a condo in the city rose to $299,000, a 10.3 percent gain from a year ago, the Illinois Association of Realtors reported Tuesday. That followed year-over-year gains of 2.8 percent and 4.3 percent, respectively, in March and April.
That boosted the median price for the city overall to $238,450, a 3.7 percent increase, although the median price for a single-family home fell 12.2 percent on a year-over-year basis, to $144,936.
Sales of all homes within the city fell 17.1 percent from a year ago to 1,705 homes sold in May.
Despite some signs of health in the marketplace, sellers shouldn’t break out the champagne, says Mabel Guzman, president of the Chicago Association of Realtors.
“Last year we already had an erosion of price,” she said. “Now we’re seeing prices bounce back up, but it’s only three months. Let’s not get hysterical about it. We really need to see six months before we say we are getting somewhere.”
Overall, the report showed the Chicago-area housing market continued to face difficult comparisons with the spring and summer of 2010, when temporary federal homebuyer tax credits created demand for homes and sparked some small price appreciation.
There were 6,608 homes sold in the Chicago area last month, a 12.8 percent decline from a year ago. Among the nine Chicago-area counties, only Kendall County recorded an improvement in sales volume — 6.7 percent.
The median price of $169,900 was down 10.8 percent from last year, when the median price was $190,500. The only median price improvement was recorded in Grundy County — 3.2 percent. The median price means half the homes are sold for more and half for less.
Average home prices also recorded declines from a year ago, including drops of 10.2 percent within the city and 4.1 percent for the Chicago area as a whole.
May condo sales outpaced sales of single-family homes by more than 30 percent, a statistic that Guzman attributes to buyers focusing on units that are easier to acquire and to continued purchases of distressed condos by investors, some using cash, who convert them into rental units.
“Investors were out in huge numbers last year,” Guzman said. “Now they are becoming a little more picky. It’s all about pricing and it’s about profitability.”
There is some anticipation that year-over-year sales volume could turn positive near the end of summer, when the difficult comparisons with last year’s tax credit period are erased. But not everyone is so optimistic.
On Monday, economists at Fannie Mae predicted slower economic growth for 2011, largely tied to issues affecting the housing market. “We still have not seen the bottom for home prices, expecting additional home price declines through the third quarter before flattening out at the end of 2011,” Fannie Mae said in a statement.
Separately, a Standard & Poor’s/Experian report showed that in May defaults on first mortgages in the Chicago area fell 3.69 percent from April and were down 39.25 percent from May 2010. The number of people with second mortgages who fell into default rose 36.41 percent since April, but was down 53.16 percent from a year ago.
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