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The City of Des Plaines
The City of Des Plaines is located approximately seventeen miles from the Chicago Loop. Located in the heart of the northwest suburbs of Chicago, Des Plaines residents are within minutes of all major transportation centers and Chicago’s O’Hare International airport. Spanning over 15.85 square miles, representing 10,150 acres, with a population of 58,710, the City is one of the largest northwest suburbs in Cook County, Illinois.
In addition to an ethnically diverse community, the city is home to several Fortune 500 companies as well as many industrial, commercial, retail and service businesses -- giving residents low property taxes with a wide variety of city services.
In the October, 2008 edition of Chicago Magazine, the article titled “Where to Buy Now” described Des Plaines as, “…..one of 14 up-and-coming Chicago neighborhoods and suburbs where prices are relatively low and the promise for future growth is strong”.
In the “Market Trends-Overview”, I explained where we obtain the data to identify and analyze these Market Trends and how we use this information in appraising Residential properties. For each of the individual Suburban areas, I will include a separate market analysis report for that suburb and include one or two charts to show what the trends look like for a particular Village or City in our community.
So, let’s take a look at some current “market trends” for Single Family Detached residences in Des Plaines:
The report above is the same “Market Analysis” report that I include in my residential appraisal reports. This analysis is based on the most recent data available by Midwest Real Estate Data, LLC via the “connectMLS” system. Using the sales data from the MLS (multiple listing service) is NOT all inclusive of the sales activity in an area, as all sales are not typically recorded in the MLS. The appraiser uses a combination of reasonably available information from various data sources based on its reliability such as; city/county records, real estate agents, FSBO information (For Sale By Owner), assessor’s records, recorder of deeds records and web site listing services. Also, in the analysis above, the use of the “median” sales price is used with smaller sample sizes because use of an “average” sales price can sometimes distort the sales comparisons in the year over year analysis based on one or two very high or very low sales.
So, what we’re seeing for Single Family Detached homes in Des Plaines is:
1) There is a 10.84% decline in the median sales price for the six month period ending 10/31/2008 vs. the same six month period in 2007
2) Current six month period had 140 closed sales vs. 173 in the same six month period in 2007
3) With an absorption rate of 24.33 sales per month we are currently looking at a 17.88 month supply of homes for sale
4) Over the past 3, 6 and 12 month periods, the average “days on market” for a listing was 163 days to 172 days, while the current actives and pending listings are exceeding six months
5) The sales to list ratio is currently 91.99%
Now, let’s take a look at two charts that reflect sales data for the past three+ years (01/01/2005 to 10/31/2008), again, these results are for Single Family Detached residences in Des Plaines:
In the chart above, we can see two areas of concern:
1) The trend would indicate that while there was a moderate increase in the average sales price from 2005 to 2006 and even a flat or stabling in the average sales price from 2006 to 2007, the market has started to decline 1st quarter of 2007 and continued through present.
2) The trend for “number of sales” per quarter has shown a steady decrease year over year, even with moderate increases during the 2nd and 3rd quarters of 2008 which are traditionally the strongest months
Let’s look at another chart, again representing sales of Single Family Detached Residences in Des Plaines:
This chart gives us a view of the “Average Days on Market” for a listing before it sells and secondly, over the same three+ year period a view of how the “Sales to List Ratio” has changed.
What we’re experiencing is a “declining value” market trend. With these declining values, properties are not selling as quickly and staying on the market for a longer period of time. And, consequently, the eventual sales price (as indicated in the “Sales to List Ratio”) is considerably less than the list or asking price.
Now, I’ve included the same or similar type charts for the “Attached Single Family” residence types in Des Plaines, what we’re talking about here are the Condos and townhomes:
OK, what we’re seeing for Attached Single Family homes in Des Plaines is:
1) There is a -2.15% decline in the median sales price for the six month period ending 10/31/2008 vs. the same six month period in 2007
2) Current six month period had 172 closed sales vs. 255 in the same six month period in 2007
3) With an absorption rate of 28.00 sales per month we are currently looking at a 24.29 month supply of homes for sale
4) Over the past 3, 6 and 12 month periods, the average “days on market” for a listing was 152 days to 157 days, while the current actives and pending listings are exceeding six months
5) The sales to list ratio is currently 94.77%
Now, let’s take a look at two charts that reflect sales data for the past three+ years (01/01/2005 to 10/31/2008), again, these results are for Attached Single Family Residences in Des Plaines:
Again, in the chart(s) above, we can see two areas of concern:
1) The trend would indicate a gradual increase in average sales price early in 2005 through the end of 2006, tapering off through 2007 and for the remainder of the year. In early 2008 a small volume of sales has contributed to a spike downwards in average sales price which stabilize through the remainder of 2008 with a moderate decrease in sales price.
2) The trend for “number of sales” per quarter has shown a steady decrease year over year, even with moderate increases during the 2nd and 3rd quarters of 2008 which are traditionally the strongest months
Conclusion:
This gives you an idea of how we look at historical data to identify and analyze market trends. For each of the individual Suburban areas, I will include a separate market analysis report for that suburb and include one or two charts to show what the trends look like for a particular Village or City in our community. Again, if you have any questions or need assistance, please call me or send me an E-mail.
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