Chicago no. 2 in super-fast home sales

By: Abraham Tekippe
March 15, 2013

www.chicagorealestatedaily.com

Chicago ranked No. 2 for so-called “flash sales” — homes that go under contract in 24 hours or less — with 261 sales recorded in the past five months, according to a report released today by Seattle-based Redfin. Only Phoenix ranked higher, with 540.

“Your average person now knows that now is the best opportunity that they'll ever have probably in their lifetime to buy real estate,” said Thaddeus Wong, co-founder of Chicago-based @properties. “There are so many buyers that are looking that have lost out on houses in multiple-offer situations that when the buyer finds the house that they really want, they just pay the asking price.”

The “flash sale” numbers point to pent-up demand in the local housing market, where the inventory of homes for sale dropped to a six-year low in 2012. The number of existing homes for sale in the Chicago area fell more than a third last year to just under 39,000, about 4.7 months of supply, according to multiple listing service Midwest Real Estate Data LLC (MRED).

Those numbers, coupled with rising home prices, which increased 2.2 percent in the Chicago area in 2012, are forcing buyers to act quickly to take advantage of current market conditions.

“In this market, we have pressure from a couple of variables: No. 1, you have the pressure of increasing interest rates; and No. 2, you have the pressure of appreciation,” Mr. Wong said. “The speed at which somebody enters the market right now is crucial to their investment.”

Still, the limited supply, particularly in the city's most desirable neighborhoods, hasn't translated to buyers paying more for homes than they're actually worth, Mr. Wong said.

“When a home goes on the market today and it's overpriced, it still doesn't sell,” he said. “Buyers are not willing to overpay for real estate today.”

Mr. Wong added that as frustrating as the fast-paced market can be for some homebuyers, it's a necessary step in housing recovery that will likely continue into 2014.

“The only way that we're going to get back to a balanced market is if we go through this period,” which will help generate confidence in the market, he said. “Once that confidence reaches the average consumer, where they feel that the foundation of the market has stabilized, then we will see continued growth.”