July home sales in the Chicago area fell 4.9 percent from the previous year, continuing a trend of weaker sales that began in the spring, according to data released Thursday by Illinois Realtors.
In Chicago itself, the decline in sales was even steeper, with sales down 5.7 percent over the last year.
The decline is linked to the limited supply of homes for sale on the market. The low inventory of available homes is leaving shoppers with few choices and causing prices to climb, according to the Illinois Realtors.
"Housing affordability is once again becoming a concern, especially for those seeking to enter the housing market," said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois. In a forecast for the Chicago area market, he said the concern for the future is that continuing low inventory will dampen demand as income growth fails to keep pace with rising home prices.
In the Chicago area, the median price of homes sold in July climbed 4.4 percent to $248,000 as the inventory of homes for sale plunged 16.4 percent compared to the previous year. There were 11,322 homes sold.
In the city of Chicago, the median price rose 3.8 percent to $301,000, as the inventory of homes sold dropped 7.7 percent. There were 2,621 homes sold.
The highest appreciation was in single-family homes, which climbed 5 percent to a median $250,000 in Chicago, while condo prices eked out gains of just 1.6 percent over the last year to $325,000.
But in the metro area, condo prices have been climbing more than single-family homes. In July, the median price was up 5.6 percent over a year ago to $207,000. The median price for single-family homes rose 4.7 percent to $267,000.
"The market has slowed because of the inventory," said Doug Carpenter, president of Illinois Realtors. "Buyers are still looking but just aren't finding what they want."
Meanwhile, because buyers are competing for a short supply of homes for sale, prices are rising, he said.
Homes in the $100,000 to $200,000 "have been hit heavily by a lack of inventory," he said. "They are snapped up so quickly."
In the Chicago area, the average length of time it took a home to sell after being put on the market was 39 days and in Chicago it was 34 — a decline of more than 10 percent over the previous year.
Carpenter said in a typical strong market, homes would sell in about three months.
"The last time inventories in the state were strong was May 2015," Carpenter said.
Sales have been dropping in most counties in the Chicago area as inventories have been plunging and prices rising. The exception was DeKalb County, where the 150 homes sold in July marked a 19 percent climb over the previous year. Prices rose 5.9 percent to a median of $169,500.
In Cook County, sales dropped 3.9 percent as the median price rose 4 percent to $258,000. The median price of a home was $262,000, and the median condo price was $250,000.
The largest price increases were in Lake County, where prices climbed 6.9 percent to $254,990; McHenry, where prices climbed 10.3 percent to $215,000; and Grundy, where prices climbed 10.9 percent to $189,000.
The most modest price increase was in DuPage County, which had a 1.8 percent increase as the median reached $280,000.