Illinois Housing Market Remains Subdued

Illinois Housing Market Remains Subdued-Image via Wikipedia

Record low mortgage interest rates and more affordable home prices benefited buyers in September, although the Illinois housing market remains subdued after the tax credit without stronger signals from the economy in the areas of jobs and improved consumer confidence. According to the Illinois Association of REALTORS® latest report, statewide total home sales (which include single-family and condominiums) in September 2010 totaled 8,024, down 4.7 percent from August’s 8,419 home sales; year-over-year home sales are down 23.4 percent compared to September 2009 sales of 10,470 homes. Year-to-date sales remain positive, up 4.9 percent January through September 2010 with 81,669 home sales compared to 77,860 home sales for the same period in 2009.

Year-to-date, the single-family median home sales price increased 1.7 percent to $149,900 compared to $147,400 for the same period in 2009; the year-to-date median price for total home sales (single-family and condominiums) was off 1.9 percent to $155,000 from $158,000 last year. The median is a typical market price where half the homes sold for more, half sold for less. The median price for the month of September 2010 was $145,983, down 8.0 percent from $158,700 in September 2009.

“It’s clear the housing market benefited from the tax credit through the first half of the year and now we are feeling the withdrawal symptoms in the form of slower sales. Still this extraordinary buyer opportunity should continue as mortgage rates remain in rock-bottom territory as they were just last week averaging 4.19 percent for our region,” said REALTOR® Sheryl Grider Whitehurst, ABR, CRB, GRI, president of the Illinois Association of REALTORS® and the Development and Operations Coordinator for Traders Realty in Peoria. “Bottom line, home sales will struggle until jobs return to the economy, consumer confidence improves and foreclosures work their way through the system.”

The monthly average commitment rate for a 30-year, fixed-rate mortgage for the North Central region was a record low 4.34 percent in September 2010, down from 4.43 percent during the previous month, according to the Federal Home Loan Mortgage Corporation. Last year in September it averaged 5.06 percent.

In the Chicagoland Primary Metropolitan Statistical Area (PMSA) in September total home sales (including single-family and condominiums) reached 5,327 homes sold, down 5.4 percent from August’s total of 5,632; sales were down 22.4 percent compared to 6,862 homes sold in September 2009. Year-to-date sales remain up 10.5 percent January through September 2010 with 54,619 sales compared to 49,424 home sales for the same period in 2009.

The median home sale price for the Chicagoland PMSA was $175,000 in September 2010, down 12.1 percent from $199,000 in September 2009. Year-to-date, the median home sale price is down 5.5 percent to $189,000 from $200,000 for 2009.

“The slow pace of employment recovery is certainly dampening housing demand,” said Geoffrey J.D. Hewings, the Director of the Regional Economics Applications Laboratory at the University of Illinois. “In particular there is increasing concern that an employment rebound may not occur to any significant degree until late 2011. Forecasts for Illinois unemployment over the next 12 months continue to reflect the uncertainty in the economy; job growth is anticipated to be between a positive 24,000 and a negative 31,000.”

The Illinois unemployment rate improved by 0.2 points to 9.9 percent in September from August, the first decline below double-digits since August 2008; the national unemployment rate remained unchanged at 9.6 percent in September.

Hewings added: “This has been a difficult quarter for the housing markets in Illinois and Chicagoland. The forecasts for the final quarter of 2010 suggest more of the same.”

In the city of Chicago, September total home sales (single-family and condominiums) were down 26.9 percent to 1,403 sales compared to 1,918 homes sold in September 2009. The city of Chicago median price in September 2010 was $180,000, down 20.0 percent compared to $225,000 a year ago in September 2009.

Year-to-date sales remain up 11.1 percent January through September 2010 with 15,285 sales compared to 13,760 home sales for the same period in 2009. The year-to-date median sales price for the city of Chicago is down 7.9 percent to $210,000 from $228,000 for 2009.

“Distressed properties are driving sales, putting pressure on the overall median price of homes sold in today’s market. A positive indicator that our market is moving as it should can be seen with a steady pace of units sold and existing inventory being absorbed,” said Mabel Guzman, president of the Chicago Association of REALTORS® and a REALTOR® with Su Familia Real Estate, Chicago. “With condo sales in the city of Chicago up over 11 percent year-to-date from the same period in 2009, we see an expansion of choices for potential buyers to jump in the market now and find great value for homes they may have not otherwise been able to afford.”

According to the IAR report, total home sales (single-family and condominiums) comparing September 2010 to September 2009 were up in 16 of 100 Illinois counties reporting with 41 of 100 counties posting median price increases. The following Illinois counties reported gains in the median price for the month: Champaign, up 8.9 percent to $147,500; Jo Daviess, up 3.4 percent to $150,000; LaSalle, up 2.7 percent to $97,500; Madison, up 5.2 percent to $120,950; McLean, up 2.3 percent to $153,375; Sangamon, up 4.8 percent to $120,550; and Tazewell, up 14.3 percent to $136,000.

Sales and price information is generated from a survey of Multiple Listing Service sales reported by 35 participating Illinois REALTOR® local boards and associations. The Chicago PMSA, as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

The Illinois Association of REALTORS® is a voluntary trade association whose 46,000 members are engaged in all facets of the real estate industry. In addition to serving the professional needs of its members, the Illinois Association of REALTORS® works to protect the rights of private property owners in the state by recommending and promoting legislation that safeguards and advances the interest of real property ownership.

Find Illinois market stats data at www.illinoisrealtor.org/marketstats.

** Economist Geoff Hewings will be available for media interviews between noon and 3 p.m. CST on Monday, October 25.

SOURCE Illinois Association of REALTORS(R)

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