Market Snapshot: Supply & Demand

In previous entries we saw the number of units selling in 2008 decrease over 2007 presumably because of decreased demand. 

I like to look at the first time home buyer market (priced between $200k and $500k) to determine the supply /demand balance.  Doing so helps get a glimpse as to what the future might hold.

Absorption, Condos $200k to $500k, Sold listings from previous 12 months:

Neighborhood            Active     Sold Listings   Absorption (months)
Lakeview                   567            1200                5.67
Lincoln Park               299             527                 6.8
Lincoln Square           156             312                 6.0
Near North Side         1030           1289                9.58
Loop                         374             590                 7.67
Near South Side         620             766                 9.7

Generally, supply and demand is considered balanced when the absorption takes about 6 months.  So, for the time being, it looks like prices are stable in Lakeview, Lincoln Park & Lincoln Square.  There appears to be downward pressure on prices in the Near North Side, Loop & Near South Side. 

We will continue to track these numbers as we get into the 2009 "selling season".

Paul Vranas
Vranas Properties
Chicago Real Estate