Lincoln Park Chicago Real Estate analysis, trends, sales, inventory levels - June 2023

Lincoln Park | May 2023

If you've noticed a rather glum attitude from your favorite Lincoln Park Realtor lately it's most likely not your imagination. It's been a tough year to be a real estate professional and it doesn't appear it will get easier any time soon. Total real estate transactions in Lincoln Park are down over 41.4% year-to-date, and current data suggests a continued rough road ahead. Inventory levels (homes listed for sale) are at historic lows, indicating that outside of an unexpected catalyst the market's slow pace should continue throughout 2023. In this article, we will dissect the current state of the Lincoln Park real estate market, including what's causing the slowdown, current inventory levels, pricing, and our prediction for the remainder of 2023. Let's get started and dive into the numbers...

Who doesn't love data? We certainly do, which is why we pay such close attention to Lincoln Park's housing trends and the analysis that will be discussed below. It's impossible for us realtors to truly work in your very best interest without a deep understanding of the data that leads to real-world fluctuations in housing supply and demand. While the data below supports a macro or high-level look at the current state of Lincoln Park's real estate market, it's even more critical to analyze similar data on the specific area of Lincoln Park, and the property type you hope to buy or sell. While collecting data on individual segments of Lincoln Park is far too time-consuming for a monthly real estate blog, it is an essential part of the valuation process for anyone hoping to successfully buy or sell a Lincoln Park property. We're happy to share our knowledge, experience, and our analytical skills with you. Contact us today if you have specific questions on Lincoln Park real estate. Our team is here to assist.

Lincoln Park | Closed Sales Activity

As of April 30th, Lincoln Park's closed real estate transactions were down 41.4% when compared to the same period in 2022. Look at the graph below of monthly sales and note that we're using a 6-month rolling average (month-to-month data is too volatile and may not accurately represent current market trends). You can see the outlier effects of the easing of COVID restrictions in 2021 and 2022, where transactions hit all-time highs. The headline 41.4% year-over-year decline in sales is less dramatic when you consider 2021 & 2022 as outlier years. However, the overall market is still very slow, and as you will see in the data and commentary below, current contracted properties, inventory levels, and market times, all point to our markets slowing even further from where we are now. The good news is that Lincoln Park's pricing is relatively stable (covered below). The reduced demand we are experiencing - due to higher interest rates - is more than offset by historically low inventory levels. Buyers are hesitant to take on a new 6-7% mortgage rate, and sellers do not want to part with their rock-bottom 2% rates. The end result is a stalemate (no one wants to move) with both diminished supply, and demand, contributing to the slowdown.

Sales are down 41.4% year-over-year. The lowest level in over a decade

Lincoln Park | Contract Activity & Month's Supply

Home contract activity, when combined with current inventory levels, is easily the most important data to analyze if you hope to fully understand the current state of the real estate market. April's headline number shows a dramatic 43.8% decline in year-over-year contracts written for Lincoln Park SFHs and condos. While the number alone is eye-popping and a risk to future valuations, it's less of a concern when you consider inventory levels are also down 31.8% over the same period. Higher interest rates and lower inventory levels are the catalysts for the steep reduction in real estate transactions we are experiencing in Lincoln Park. This decrease in contracts written is not a direct indication of direction on valuation, but it does indicate that May and June closings will once again be well below historic norms.

Home contract activity is down 43.8% for the 3 months ended April 30, 2023

The month's supply is down 5.6% from 2022

Lincoln Park | Inventory Levels

Lincoln Park's inventory of homes for sale is currently so low that it's literally off the charts (see below). The current inventory of listed homes is down 31.8% from last year. And this is after 2022's inventory levels were off 36% from 2021. To put this in perspective, there were nearly 1000 homes for sale in Lincoln Park in 2011. Today we have a total of 208 available, or a decline of nearly 80% from the peak year of our data series. Low inventory levels are actually good for supporting property valuations. As discussed above, we anticipate inventory levels to remain low for the foreseeable future.

The current Lincoln Park inventory of homes for sale is down 31.8% from 2022

Lincoln Park | Median Sales Price

Lincoln Park real estate valuations remain relatively stable with a 0.2% increase over the 6-month period ending April 30, 2023. This is actually very good news for us considering much of the country is experiencing declines in real estate valuations. Persistently high mortgage rates and home prices continue to put off many prospective homebuyers as fears of ongoing inflation, bank sector volatility, weakening economic growth and an impending recession hang in the air. Chicago also has the ongoing issues of increased crime, a lingering remote working environment, and the recent trend of suburban flight that may directly impact demand for Chicago housing. How Chicago fares going forward is difficult for anyone to predict. With so many of us with historically low 2% mortgage rates, I anticipate many owners will choose to stay put and not sell unless they absolutely must. Others may decide to rent their homes and cash flow their low mortgage rates. All the variables above point to continued low inventory levels going forward (lack of sellers). This same lack of inventory may ultimately be the catalyst for increases in valuations should demand once again return to more normalized levels.

Lincoln Park's valuations are up 0.2% in 2023. Low inventory levels are contributing to stable valuations

Are you in the market to buy, sell, or rent a Lincoln Park home? Are you interested to see the current data on a specific area or property type in Lincoln Park? Contact us today and we will be happy to share our expertise. Our goal is to help make your next real estate transaction a complete success.