CAR: 2008 Unit Sales Down 29%, Price Up 8%

According to revised figures released today by the Chicago Association of Realtors, based on sales in the city of Chicago recorded on the multiple listing service (MRED), unit sales of condos and townhomes in 2008 were down 29% from the previous year; surprisingly, median sales price was up 8%.

The CAR figures are for what is called Type 2 Single-Family Attached housing, the vast majority of which are condos. CAR makes no figures available for only condos.

According to CAR, the total unit sales in 2008 were 14,603, compared to 20,690 in 2007, a decrease of 6,087. Median sales price in 2008 was $313,750, compared to $290,000 in 2007, an increase of $23,750, or 8%.

Average market time (days on market) went from 120 in 2007 to 127 in 2008, an increase of 7 days, or 6%.

By comparison, for single-family (detached) homes, unit sales were down 14% (from 7,527 in 2007 to 6,459 in 2008, or by 1,068); median sales price was down 23% (from $255,000 in 2007 to $197,000 in 2008, or by $58,000).

For an Excel spreadsheet with all the figures, including a breakdown by all 77 census areas, from 1992 to 2008, e-mail your request to Ric14@ChicagoCondosOnline.com or visit ChicagoRealtor.com, CAR's Web site. (To access the figures from CAR's site, you must be a member.)

Comment from CAR President Dave Hanna:

I would temper this news with a suggestion that everyone needs to look at the micro-market where the target property is located.

Neighborhoods with the highest foreclosure rates (largely lower income and emerging markets) had the biggest drops in terms of percentage of sale price. It's no coincidence this is where there are fewer condos and new construction of any scale.

Add to that, the high-end market 2008 closings of units put under contract in 2005 and 2006 drove the average sales price for condos all year, despite an over supply of inventory.

There is also a higher incidence of mortgage fraud in the property history of these areas. Combined with a decline in demand in those areas (flight to quality by buyers who can now buy in more-affluent neighborhoods ), and closed sales of foreclosed property at much-lower price points, and you have this mess.

The good news for sellers/owners in many areas of the city is they have not lost the amount of value (to date) they may perceive from a broad based statistical picture like average, or median, sales price.

If the market does not get some legs, that news will be short lived.

Comment from Jim Merrion, Regional Director, RE/MAX Northern Illinois:

In 2007, the city condo/townhouse market faired substantially better than the market for single-family homes. In 2008, the shoe was on the other foot.

Purchasers of city condos and townhouses are primarily first-time buyers, singles and empty nesters, many of whom use the exceptional property search capabilities of our www.illinoisproperty.com Web site.

In today’s uncertain economic environment, it is fairly easy for these groups to delay a move, and that is what happened in 2008. First-time buyers also may have been discouraged by higher fees and down payments required by lenders.

For the families that typically buy detached homes, the situation is somewhat different. The arrival of a new child or the need to live in a location that better accommodates a range of family priorities can be powerful incentives to find a new home, which may explain why sales of single-family (detached) homes declined more modestly.