SPRINGFIELD, IL – August 11, 2009 – (RealEstateRama) — Pent-up demand plus affordable prices, low interest rates and the tax credit incentive provided a substantial boost to the Illinois housing market in the second quarter, according to the Illinois Association of REALTORS® (IAR). Statewide total home sales (which include single-family and condominiums) increased by 61.8 percent in the second quarter of 2009 to 27,531 homes sold compared to 17,017 homes sold in the first quarter of 2009. Sales were down 16.4 percent from second quarter 2008 sales of 32,949.
The Illinois median price in the second quarter of 2009 of $160,000 was up 9.6 percent from $146,000 in the first quarter; it was down 16.2 percent from $190,978 in the second quarter of 2008. The median is a typical market price where half the homes sold for more, half sold for less.
“We are moving through inventories and that’s a good sign for the Illinois housing market. Year-over-year sales are still lower, but one promising trend is the rate of decline has slowed in recent months and is now at a pace last seen in the third quarter of 2007. More first-time buyers are taking advantage of the federal tax credit while distressed properties prolong the downward pressure on prices,” said Pat Callan, president of the Illinois Association of REALTORS®. “In July the Illinois Housing Development Authority announced its new Home Start program that offers qualified first-time homebuyers a zero-interest, short-term advance loan on their anticipated federal first-time homebuyer tax credit. Also, the FHA loan modification option now offered by the federal Making Home Affordable program is another step forward to help struggling families stay in their homes.”
Adds Callan, broker-owner of Realty Executives Premiere in Wheaton: “REALTORS® are calling for additional housing stimulus including an extension and expansion of the homebuyer tax credit program to continue moving housing in the direction of recovery. The current program ends on December 1 and qualifying first-time homebuyers realistically should be under contract before October to close in time and get the added benefit from the Illinois Home Start advance loan, which also ends December 1.”
The second-quarter commitment rate for a 30-year, fixed-rate mortgage for the North Central Region reached a low of 5.07 percent, according to data from the Federal Home Loan Mortgage Corporation. It was down from 5.12 percent in the first quarter of 2009 and down from 6.12 percent in the second quarter of 2008.
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), total home sales (including single-family and condominiums) increased 67.7 percent in the second quarter to 17,622 homes sold compared to 10,507 home sales in the first quarter of 2009; sales were down 15.4 percent from 20,827 homes sold in the second 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 increased 7.2 percent to $201,050 in the second quarter from $187,500 in the first quarter of 2009; year-over-year it was down 19.6 percent from $250,000 in the second quarter of 2008.
“The metropolitan areas in Illinois are expected to follow the patterns of the state as a whole; sales are anticipated to be up on a month-to-month basis but prices will continue to trend down over the current quarter (July, August and September),” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “In Peoria, Quad Cities, Champaign-Urbana, Kankakee, Metro East and Springfield, the September median prices are forecast to be higher than those recorded in September 2008.”
In the city of Chicago the median price of a home was up 7.0 percent in the second quarter of 2009 to $230,000 compared to $215,000 in the first quarter of 2009; it was down 25.8 percent from $310,000 in the second quarter of 2008.
Total home sales (single-family and condominiums) jumped 65.2 percent to 4,947 homes sold in the second quarter of 2009 compared 2,995 home sales in the first quarter; sales were down 21.3 percent from 6,287 homes sold in the second quarter of 2008.
“We continue to see two market trends, the distressed and the traditional marketplace. Sellers are still trying to determine a fair price for their property, and buyers are trying to assess the value of a home. Both parties need to compare their property to the reality of location, conditions of property, and circumstances of the sale,” said David Hanna, president of the Chicago Association of REALTORS®. “In the second quarter, we see the ongoing absorption of existing inventory by investors and smart homebuyers, and 2009 continues to be a great market of opportunity.”
According to the IAR report, median home sale prices comparing the second quarter of 2009 to the same period in 2008 were up in 42 of 100 Illinois counties reporting including Adams, up 9.9 percent to $100,000; Coles, up 4.7 percent to $89,000; Kankakee, up 2.8 percent to $135,500; Livingston, up 4.6 percent to $93,000; Rock Island, up 11.0 percent to $99,900; Sangamon, up 0.1 percent to $117,900; and Tazewell, up 3.3 percent to $127,000.
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 50,000 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 second quarter 2009 home sales statistics reports are available from www.illinoisrealtor.org, click on Market Stats.
Mary Schaefer/Ann Londrigan