You've seen the headlines: real estate has been hot almost everywhere for the past two years and now rising interest rates are starting to cool it off. But what's really happening?

Here's my take.

As we head into the fall, we are seeing new listings come to market and buyers renewing their searches now that interest rates have leveled off right around (or just under) 5 percent. Yes, they're quite a bit higher than they were a year ago, but the historical average is 7 percent, so they're still relatively low.

Real estate supply and demand is measured by months supply of inventory: how many months it would take for all of the current inventory to be absorbed. A buyers' market is defined as 7 or more months of inventory and a sellers' market is less than 6 months' supply.

As we entered the Great Recession in 2008, we were already squarely in a buyers' market. For example, in January 2008, there were 8.6 months of condo inventory in Lincoln Park and the lowest point in that neighborhood came a few years later, when inventory peaked at 11.3 months' supply in July 2011, and median sale price reached its lowest a few months later, in September 2011.

Now is very different from 2008 because inventory remains extremely low. Here are some stats for specific areas:

• Lincoln Park condos: 2 months of inventory; new listings down 22% YTD; prices up 4.4% YTD

• River North/Gold Coast condos: 5.4 months of inventory; new listings down 9.3% YTD; prices up 6.2% YTD

• Wicker Park/Bucktown condos: 1.8 months of inventory; new listings down 17.1% YTD; prices up 1% YTD

• Arlington Heights homes: 1.2 months of inventory; new listings down 21.7% YTD; prices up 7.2%

As the graph below shows, for the City of Chicago as a whole, median sold prices dropped last week to a 5-month low of $292,250, but were still 3% higher than median sale prices the same week in 2021.

The reality is that prices didn't increase as exponentially in Chicago over the past two years as they did in other cities and although prices might decrease slightly this fall (they normally do - fall is a great time to buy!), we are still securely in a sellers' market in most Chicago neighborhoods.

Curious what this means for you? Let's chat!

PS: If you’re thinking of selling in 2023…let's take photos now while your outdoor space is looking its best!

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