Chicago home sellers make record profits
With house prices rising rapidly during the pandemic-driven housing boom, homeowners’ stakes rose rapidly. Just before the pandemic hit, in the first quarter of 2020, Chicago-area sellers raked in $36,000, according to Attom. (That’s the gross product, not taking into account any money the sellers may have spent on upgrades during their tenure.)
In the two and a half years that followed, their revenues increased by just over 120%.
But sellers here have lagged behind the rest of the country. Nationally, revenue averaged $123,869 in the second quarter, up 134% from the start of 2020.
The Chicago area’s average profits were lower than any other city in the nation’s 10 largest. Los Angeles led with $308,000, followed by Boston with around $218,000. Only one major city other than Chicago had an average product below $100,000. It was Houston, about $96,000.
This is the result – and at the same time, it could be a factor – of the slower growth in house prices in Chicago than in most other major cities during the boom. This is a result because slower price growth means sellers’ equity grows less. This may also be a factor, in that move buyers don’t have so much money from the sale of their old address to exuberantly bid on the next one.