Chicago Homebuyers Seeing Smaller Discounts

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According to data gleaned from Redfin, a Seattle-based online real estate brokerage and search company, Chicago-area neighborhoods are seeing homes being sold at prices closer to list prices than they were at the beginning of the year.

The list price, according to Redfin, is "The price of a home for sale set by the sellers and their listing agent." This number can be lowered multiple times during its stay on the market and the company notes that "It's important to watch how the list price changes for homes you're interested in as it can indicate how willing a seller may be to drop her final sale price."

The sale-to-list ratio, which Redfin defines as "The final sale price (what a buyer pays for the home) divided by the last list price expressed as a percentage," offers an easy way to gauge what homes are selling for. As expected, if a neighborhood has a sale-to-list ratio that's more than 100 percent, that means that homes there are selling for more than their list prices. If the ratio is less than 100 percent, that means homes are going for less than their list prices.

At the beginning of 2009, the sale-to-list ratio in Chicago was approximately 94.85 percent. For the week ending Dec. 21, this ratio was at 96.56 percent, indicating that discounts many buyers have enjoyed in recent months have been shrinking.

Volo, Hazel Crest and Barrington Hills are the only Chicago area cities that currently have sale-to-price ratios of 100 percent or more, according to Redfin.

Since September 2008, median list prices per square foot have lurked below median final sale prices per square foot in Chicago. Redfin tracks prices as 90-day moving averages.

According to the company, from Sept. 25 through Dec. 24, 48.4 percent of houses and condos in Chicago have seen an average of two reductions that led to a 7.7 percent cut from the initial list price.

Trulia, a San Francisco-based real estate search site, shows that the median sale price of a home in Chicago from September to November was $245,000, down 15.8 percent from the same period last year.

The National Association of Realtors indicates that the projected median selling price for existing homes in the Midwest in November was $140,800.

Those looking to buy or sell homes in the Chicago area can look at neighborhood-specific market trends, a glossary and other helpful information on Redfin's website.
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