For every appraisal I write, I analyze the neighborhood and study value trends for the specific types of property in the specific neighborhoods. This enables me to determine if a specific inventory type within that neighborhood is stable, increasing or declining. I do not consider national or regional data to be accurate for the Chicago market because each neighborhood is its own micro-economy with its own supply and demand characteristics. Even within a neighborhood, single family homes could be increasing, while condominiums, (or more specifically, 1-bedroom condominiums) are declining.
Chicago is a cyclical market with seasonal highs and lows that can fluctuate as much as 5%. I consider the neighborhoods in 12 month segments, while also looking at quarterly activity to get an overall sense of the data. I believe this to be more accurate than looking solely at quarter over quarter, or month over month data.
This morning I am working on Lincoln Park Single Family Homes.
In the cycle from July of 2011-July of 2012, Lincoln Park had 72 home sales compared to the 45 sales between July of 2010 and July of 2011. That is a 60% increase in sales over the previous year! Even more interesting, median prices for the same period in 2010-2011 were $1,250,000, with an average sales price of $1,638,000. This past 12 months, median prices are at $1,552,500, with an average sales price of $1,685,000.
This means median sales prices are up 24% (appearing to be due to a higher concentration of home sales in the 2 Million dollar range), and averages are up 2.8% for all homes sold in the neighborhood. Good news for Lincoln Park! There appears to be a bit of a lingering oversupply, with 50 homes on the market being bought at a rate of 6 homes per month, or an 8.3 month supply. If we have recovery continuing at a rate consistent with the previous 24 months, Lincoln Park will have a shortage of homes in the 2012-2013 year! Now is the time to buy a single family home in Lincoln Park!