Home Sales in Metro Chicago Real Estate Market Showed Resilience During January, Reports RE/MAX

Chicago, IL – February 17, 2011 – (RealEstateRama) — Home sales in the seven-county metropolitan Chicago real estate market showed encouraging resilience in January even though total home sales slipped 3.7 percent below the level recorded in the same month of 2010, according to an analysis by RE/MAX.

Looking at data on home sales recorded by Midwest Real Estate Data, LLC, the regional multiple listing service, RE/MAX reports that January home sales totaled 3,834 units, down from 3,980 units in January 2010.

“January sales numbers are usually the lowest of any month of the year, but they can be a harbinger of what is to come as the housing market moves into the busy spring season,” explained Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network.  “A year ago, the spring market was quite active, helped greatly by the federal tax credit offered to homebuyers.  This year there is no tax credit, yet January sales were at a very comparable level to last year’s.  That suggests buyers are returning to the market and that home buying activity this spring has more upside potential than many expert observers currently believe.”

Merrion noted that one reason for the relatively encouraging sales numbers in January was the steady pace of distressed property sales, which includes short sales and lender-owned foreclosures.  Distressed properties accounted for 48 percent of sales in January, the most since February of last year when distressed sales represented 49 percent of the total.

There were 1,847 distressed sales across the metro area in January, compared to 1,855 a year earlier and 2,206 in the prior month.   Foreclosures represented 33 percent of all sales, while short sales accounted for 15 percent.

“We don’t want to read too much into the fact that January home sales were 26 percent lower than in December,” Merrion said.  “A substantial December-to-January decrease has been the pattern in recent years.  Even when the market was just about at its peak, January sales in 2006 were 31 percent lower than December sales in 2005, and the smallest December-to-January sales decline since then was 20 percent in 2006-2007.”

Sales of attached and detached homes performed quite similarly in January, both coming in 3.7 percent lower than the prior January.  However, in terms of prices and the time required to sell a home, the differences between the attached and detached markets were more pronounced.

For detached homes, the median price (where half of all homes sold cost more and half cost less) rose to $175,000 in January, up from $172,500 a year earlier, and the average time those homes spent on the market fell from 174 days in 2010 to 171 days this year.   For attached homes, the picture was quite different.  The median price fell to $133,400 from $180,000 a year ago, a 26 percent decline.  The average time required to sell one of those attached homes increased to 188 days from 166 days.

“We’ve noticed in the last couple of years that the percentage of home sales represented by distressed properties tends to peak during the first quarter of the year.  As we move into the spring and summer seasons, sales of non-distressed properties pick up, and that tends to have a positive impact on prices,” said Merrion.

Although January sales activity in the metro area as a whole was quite similar to that seen a year earlier, sales levels varied significantly in local markets.  Three of the seven metro counties, DuPage, Kane and Lake, saw sales increase, while four counties, as well as the City of Chicago, recorded decreased sales.

DuPage County sales were up 21.8 percent to 453 units, the largest gain reported, while Kendall County sales fell 23.5 percent to 62 units, and sales dipped 15.4 percent in Chicago, with 1,066 homes changing hands.  Results for the other counties were as follows: Cook 2,300 units (-8.1 percent), Kane 256 units (+6.7 percent), Lake 340 units (+4.3 percent), McHenry 140 units (-9.7 percent) and Will 283 units (-6.3 percent).

RE/MAX has been the leader in the northern Illinois real estate market since 1989.  The RE/MAX Northern Illinois network consists of 2,300 sales associates and 110 individually owned and operated RE/MAX offices that provide a full range of brokerage services throughout the northern one-third of Illinois.  Its www.illinoisproperty.com and www.remax.com websites are leaders in consumer visits among real estate brokerage brands.  The northern Illinois network is part of RE/MAX LLC, a global real estate organization with 91,000 sales associates in 83 nations.