CHICAGO—Homes sold faster and prices were stronger in July, but lower inventory continues to act as a drag on the market, according to Illinois REALTORS®. Statewide home sales in July 2016 totaled 16,108, down 6.8% from 17,291 in July 2015. The statewide median price in July was $199,000 up 4.7% from July 2015 when the median price was $190,000.

Available housing inventory totaled 65,998 homes for sale, a 14.4% decline from July 2015 when there were 77,069 homes on the market.

“What's clear is that home building activity is not keeping pace with demand right now,” Dan Wagner, president of the Chicago Association of REALTORS® and senior vice president for government relations at the Oak Brook, IL-based Inland Real Estate Group of Companies, Inc., tells Globe St.com. “It took years to get in this situation of inventory shortage, and it will likely take years to get out. The encouraging news is that home starts are increasing, and every new home that comes on the market helps alleviate some of the shortage.”

According to the National Association of Homebuilders, Chicago-area builders had received 2,783 building permits for single-family homes last year at this time, versus 2,952 so far this year, a 6% increase. And for the state, the number of permits went from 3,730 last year to 4,139 this year, a 11% increase.

In the nine-county Chicago metro area home sales in July 2016 totaled 11,716, down 7.3% from July 2015 sales of 12,645 homes. The median price in July 2016 was $238,000 in the Chicago area, an increase of 5.8% from $225,000 in July 2015.

“In July, median prices continued to experience positive growth while sales recorded their first negative annual change in 2016,” says Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois. “However, median prices are forecast to have positive annual growth over the next three months. In addition, the percentage of foreclosed sales among total sales was 9.7%, the lowest July reading since 2009.”

The city of Chicago saw an 11.9% year-over-year home sales decrease in July 2016 with 2,714 sales, down from 3,082 in July 2015. The median price of a home in the city of Chicago in July 2016 was $290,000, up 1.8% compared to July 2015 when it was $285,000.

“If you have a home on the market, it's selling at an incredible pace,” Wagner adds. “In Chicago, the time to sell was just 38 days, and when you pair that number with double-digit annual decreases in inventory, it's a market where sellers are reaping a premium.”

Available housing inventory totaled 65,998 homes for sale, a 14.4% decline from July 2015 when there were 77,069 homes on the market.

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Home Building Activity Not Keeping Pace with Demand

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