Zillow’s Third-Quarter Report on the Chicago-area Housing Market
It’s hard to be a glass-half-full person about real estate with five years of declines behind us and at least another year of bleakness in the forecasts. But the third-quarter data released by Zillow this week does show where the bright spots are on the Chicago-area map.
To be sure, Zillow didn’t release a sunshine-and-daisies report. Its data show that the owners of 46 percent of the region’s single-family homes owe more than their homes are worth, and that 43.4 percent of all homes sold here during the third quarter of the year went at a loss.
But 55.9 percent of the region’s home sellers sold at a profit, according to Zillow. Among the places where sellers seem to be doing best these days are the Northwest Indiana towns of Porter (92.8 percent sold at a profit during the third quarter), Crown Point (92.5 percent), and Merrillville (87.1 percent). Closer-in suburban areas that fared well are Elmhurst (78.6 percent); the portion of Evanston in the 60201 ZIP Code (77.5 percent); and the portion of Downers Grove in the 60516 ZIP Code (73.1 percent). In the city, Mount Greenwood on the Southwest Side fared best (86.8 percent), followed by Edgebrook on the Northwest Side (73 percent) and by Clearing (74.1 percent), also on the Southwest Side.
The primary commonality among these places is that they have relatively older housing stock and residents; it’s likely that a large share of their sellers had bought their homes many years ago, not at peak-era prices.
We’ve put Zillow’s Chicago-area chart here. (Zillow organized its chart by ZIP Code, not by the name of the neighborhood or town. We have filled in the names of towns—or in cases where the ZIP reaches into several towns, we’ve identified just one or two. In the city, we used the official post office designation for each ZIP.)
The chart also has a set of columns about price cuts. Two of those columns—column L and column P—reflect data for the month of October 2011. All other data on the chart is for the quarter ending September 30.
The Zillow chart shows a general decline in the proportion of for-sale homes that have taken price cuts recently; this suggests that sellers have become more realistic in pricing their homes when they initially put them on the market. Sellers fretting about why their homes are sitting unsold might want to take a close look at the Zillow data on median price cuts. Have the competitive properties in your area been cutting more aggressively than you have?
Zillow’s chart examines data from the third quarter of 2011, so it’s a useful update to the most recent installment of Chicago’s annual housing charts, which looked at the 12-month period beginning July 1, 2010, and ending June 30, 2011. Keep in mind that there are some differences between Zillow’s data and Chicago’s. First, it’s important to note that column C—“Current Value of All Homes”—represents all the homes in a particular community, not just those that have sold during the reporting period. (Chicago’s charts are based only on sold properties.) And Zillow’s chart doesn’t encompass all of the metro area. Only some of the ZIP Codes in Evanston, Joliet, and Oak Park are included, for example, and ZIP Codes for Glencoe, Highwood, and Hinsdale, among others, are missing.