Tracy Cross & Associates, Inc.
2nd Quarter 2022
The Chicago metropolitan region witnessed a retrenchment in new home sales during the first half of 2022 with builders reporting 2,682 contract signings during the January-June period, a decrease of nearly 16 percent from the 3,185 units sold during the same timeframe in 2021. At the current pace, the region is on track to record 4,882 sales this year, translating to a drop of roughly 12 percent when cast against the 5,527 transactions reported in 2021, and also slightly below sales levels seen in 2020 when 4,993 new homes were sold.
New home sales in the city of Chicago totaled 205 during the first six months of the year, representing a 20 percent decrease from the 256 units contracted during the first half of 2021. In the suburbs, sales of 2,477 during the January-June 2022 period were off 15 percent year-over-year.
Four primary factors influenced the most recent downturn:
- Supply-side constraints continue to plague the region. For example, at mid-point in 2022, a total 272 production developments were actively marketing homes in the Chicagoland area, down 22 percent from the 350 production developments active at the close of 2019.
- Despite a “leveling off” of prices during the 2nd Quarter 2022 (after multiple quarters of rather substantial increases), price points for new production homes remained elevated as builders continued to navigate supply chain issues and labor shortages. For instance, the average price of a single family home in the suburbs remains in the mid-$400s, up from the mid-$300s before the pandemic.
- Recent moves by the Federal Reserve has resulted in mortgage interest rates moving beyond the 5 percent mark, a measure not seen since 2009.
- Finally, spiraling inflation on everyday commodities such as food and gas felt by consumers across all income levels is now impacting home buying decisions.
Geographically, the Southwestern and Northwestern corridors captured more than one-half of all sales in the metropolitan area during the first six months of 2022. In these two areas, a combined total of 1,389 contracts were recorded, mostly resulting from some of the region’s most competitive price points found in Plainfield with 204 transactions, followed by Yorkville (140 sales), Elgin (137), Joliet (115) and Wonder Lake (103).
The top five national homebuilding companies continued to dominate the region, accounting for nearly 75 percent of all sales during the January-June 2022 timeframe. Lennar Homes remained the largest contributor with a sales volume of 593 units during the six-month period, followed closely by D.R. Horton with 509 total sales. Rounding out the top five positions were Pulte with 353 contracts, M/I Homes with 318 and Ryan Homes with 230.
D.R. Horton’s Cambridge Lakes master-planned community in Pingree Grove, marketing four different product lines, led the region during the first two quarters of 2022 with 74 total contracts, while Lennar’s Creekside Crossing subdivision in Plainfield and its Raintree Village in Yorkville followed with 63 and 53 sales, respectively. Following these three leading developments were Crossings of Mundelein by Lennar with 45 sales during the first half of 2022 and Silo Bend by M/I Homes in Lockport with 44 sales.