There has been a lot of discussion in the national news about a cooling housing market. As a real estate appraiser with my office in Park Ridge Illinois, I’m providing a little insight into how we can dig deeper into the local market to get an idea of which direction home prices may be headed in the near term. I looked at several different metrics for single family homes in Park Ridge (charts attached are interactive).
Year-Over-Year Median Sales Price (Rolling 12 month average) – As you can see below the trend is still headed higher (12.6% increase year-over-year)
Months supply of inventory – Supply is down to 4.1 months of inventory (down 13.6% year-over-year)
Average Market Time – The average time it takes to sell a house is significantly less (down 41% year-over-year)
List to Sales Price Ratio – The amount the home sells for vs. what it was most recently listed for is also improving (approximately 96%)
Overall, these are all positive signs, but they are statistics that are in the “rear view mirror”. As I analyze the market to help homeowners determine an appropriate listing price for their home, (click here for more info on that process) I analyze forward looking indicators in an effort to be aware of what may be in store for the market.
After noting the current median sales price of $394,000 and average sales price of $450,000, I compared those two data points to a more forward looking data point, pending sales. The current median list price of the 82 detached homes currently under contract is $439,000 and the average is $498,000. Those are a combined average of 11% higher than what has sold over the last 12 months. As we know with the exception of a few hot markets, homes very seldom sell at list price. Over the last 12 months, the list to sales price ratio is approximately 96% (see chart above). Therefore, once the 4% is removed from the pending sale to anticipate the final sales price, there is still a projected increase of 6.6% over the current 12 month sales data.
In summary, while the overall rate of increase in sales prices in Park Ridge appear to be slowing, the trend appears to be still pointing up in the near term. The majority of these pending sales should close in the next 30-60 days, so it looks like Park Ridge should have some much needed momentum heading into the seasonally slower fall and winter months. For more Park Ridge charts check out our Park Ridge Page. If you have any questions, please feel free to call us anytime at (847) 863-5776.
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