Chicago home sellers are looking for ways to keep prices up while still helping buyers even as prices across the country come back from their pandemic-era peaks.
The average sale price for a new Chicago home in the first quarter was just over $439,500, a figure that has remained largely unchanged since rising 11% to $439,100 from $395,400 in the first quarter of 2021, Crain’s said. Reportciting data from consulting firm Tracy Cross & Associates.
According to Tracy Cross chief executive Erik Doersching, the use of interest rate buybacks by developers is a big reason prices remain high. It insulates homebuyers from the higher costs of financing home purchases today as the cost of debt rises. The strategy allows builders to pay part of the cost of a home upfront to reduce interest rates, essentially discounting the property without changing the official asking price.
“We’ve seen a lot of buyouts,” Doersching told the media, adding that mortgage rates have topped 6 percent since September. Builders have found, though, that “if they can buy at 5.5 per cent, that’s the sweet spot for buyers,” he said.
A December study by real estate research firm John Burns revealed that while prices have fallen in many major markets, 75% of builders across the country are offering buybacks, suggesting their pricing adjustments have yet to materialize. Rate hikes to cover the higher cost of maturing debt.
Minimal inventory is another reason Chicago is avoiding price drops.As of late March, the city’s median Asking price $333,500 is the highest ever, largely because there are only 5,160 homes on the market. That’s down 17% from 6,220 homes a year ago
In the first quarter of this year, 1,169 new homes were sold in the Chicago area, according to the publication. This is a 30% drop from the same period in 2022.However, 2,272 single-family homes sold in Cook County in March $944 millioncompared with 1,399 transactions worth $549 million in the previous month, indicating an increase in sales related to the start of spring.
— Quinn Donoghue
