SPRINGFIELD, IL – May 12, 2009 – (RealEstateRama) — March sales showed sizeable gains over February, yet tighter lending standards had a resounding effect on first quarter home sales, according to the Illinois Association of REALTORS® (IAR). Home sales (which include single-family homes and condominiums) totaled 16,748, down 23.5 percent from 21,902 home sales in the first quarter of 2008. The first quarter median home sale price was $146,000, down 21.1 percent from $185,000 a year earlier. The median is a typical market price where half the homes sold for more, half sold for less.
“A lot of first-time buyers are in the market now taking advantage of the low interest rates, moderated home prices and the $8,000 tax credit available for the next six months until December 1. REALTORS® are seeing more activity, more showings and we expect the spring housing market to begin full force as weather improves and people get motivated to move off the sidelines into homeownership,” said REALTOR® Pat Callan, president of the Illinois Association of REALTORS®. “These market conditions really offer some great opportunities for first-time and move-up buyers.”
Adds Callan, broker-owner of Realty Executives Premiere in Wheaton: “REALTORS® from Illinois and across the United States will be in Washington, D.C., next week for the National Association of REALTORS® Midyear Legislative Meetings to discuss with members of Congress further housing stimulus that includes making permanent the 2008 FHA and GSE loan limits, improved liquidity in lending markets, and expanding the $8,000 first-time buyer tax credit to include all homebuyers at all income levels. A full economic recovery is not possible without a housing recovery leading the way.”
The first-quarter commitment rate for a 30-year, fixed-rate mortgage for the North Central Region averaged 5.12 percent, according to the Federal Home Loan Mortgage Corporation. It was down from 5.86 percent in the fourth quarter of 2008 and 5.91 percent in the first quarter of 2008.
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), total home sales (including single-family and condominiums) were down 26.4 percent in the first quarter to 10,306, compared to 14,012 home sales in the first quarter of 2008. The Chicagoland PMSA, as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.
The median home sale price in the Chicagoland PMSA was down 22.8 percent to $187,500 in the first quarter of 2008 compared to $243,000 in the same period one year ago.
“There is no doubt that the burgeoning unemployment rates are dampening recovery in the housing market, but the positive numbers in the month-to-month sales suggest that the second quarter may offer the promise of some modest gains in sales and some recovery of median prices,” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois.
Adds Hewings: “Prospects for a turnaround in the state’s economy do not look promising; REAL estimates that a further 300,000 jobs may be lost over the coming 12 months. The state’s unemployment rate has increased to over 9 percent and forecasts suggest that it will rise to over 11 percent before turning down in late 2010.”
In the city of Chicago the median price of a home was down 26.8 percent in the first quarter to $216,000 compared to $295,000 in the first quarter of 2008. Total home sales (single-family and condominiums) reached 2,909 sales in the first quarter, down 37.0 percent from 4,617 homes sold in the first quarter of 2008.
“We see a sliver of good news in the growing number of units which are being sold, reflective of the absorption of the distressed properties in the Chicago market. The problem, however, which remains, is inadequate access to financing, with restrictive lending guidelines limiting the number of viable potential buyers from purchasing a home. The guidelines for lending are still not rational and are keeping good buyers out of the marketplace,” David Hanna, president of the Chicago Association of REALTORS®.
According to the IAR report, median home sale prices comparing 1Q09 to 1Q08 were up in 35 of 98 Illinois counties reporting including Boone County, up 1.4 percent to $144,000; Livingston, up 5.3 percent to $100,000; Logan, up 2.8 percent to $74,000; Monroe, up 12.7 percent to $186,000; Ogle, up 6.1 percent to $135,450; Sangamon, up 1.3 percent to $115,950; and Stephenson, up 17.0 percent to $74,900.
Sales and price information is generated from a survey of Multiple Listing Service sales reported by 37 participating Illinois REALTOR® local boards and associations.
The Illinois Association of REALTORS® is a voluntary trade association whose 53,000 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.
Detailed first quarter 2009 home sales statistics reports are available from www.illinoisrealtor.org, click on Market Stats.