When is the best time of the year to sell real estate in Chicago? The answer is anytime, especially in a seller's market. Every year, sellers go through the same process of trying to time the sale of their houses, condos and income properties. Historically, the spring and early summer months have been the prime seasons for selling and they still tend to be. However, there are few fundamental reasons for this tradition to hold, notwithstanding the weather.
As an example, consider the following chart that compiles sales data for 2-4 unit income properties on the north side of Chicago, dating back 24 months (highlighting 2013). The data is separated into three categories (Properties For Sale, Under Contract & Sold) and is broken down by quarter.
If you're a market timer, there's no question that planning a sale in Q1 2013 would have been advantageous. Between January and March, available properties for sale increased by 11% while properties that went Under Contact increased by over 97%. In hindsight, this was a great time to be on the market but real estate sales are typically reported 40-60+ days after the contract date, so there was no way to foresee this level of hyper-activity going into 2013. The flip side of selling early in 2013 is prices rose substantially throughout the year, so sellers in Q1 might have left money on the table.
To be fair, 2013 was an unusual year for real estate. This was the first time since the recent market crash when the "All Clear" flag was unofficially raised and buyers flooded the market. The peak levels of inventory, briefly touched in 2013 during Q3 and Q4, were below peak levels during the first 7 months of 2012, meanwhile buyer activity reflected in properties Under Contract and Sold was significantly higher in 2013 than 2012.
2014 is setting up much like 2013 did. Year over year inventory is down in Q1 while buyer activity is higher. Supply and demand still favors sellers entering the market. The unofficial spring market for 2014 hasn't even begun yet . The delay is due to a very cold and prolonged winter. It's true, talk to any broker and they'll rattle off exactly how many clients they have waiting for the snow and ice to melt before they list their property.
With spring only a few weeks away, I would expect to see a huge surge in inventory hit the market in a short period of time (mid March to May). I would also expect to see elevated activity from buyers and sellers throughout the balance of the year, so timing continues to be less important in the current market. This is the final push before interest rates start inching up and price appreciation begins to flatten out. A lot of the Chicago market is well below 2006 market highs, so there is room for pricing to move up from current levels throughout 2014. There's no question this is a good market for both buyers and sellers to participate in.
Photo credit: Mo