Pent-Up Demand and Tax Credit Drive October Home Sales Rally Sales Up 24.2% Statewide and 33.3% in Chicago Region

SPRINGFIELD, IL – November 23, 2009 – (RealEstateRama) — Illinois home sales took a double-digit jump in October as buyers took advantage of unprecedented buyer-market conditions with record low mortgage interest rates, affordable home prices and the federal first-time homebuyer tax credit. According to the Illinois Association of REALTORS® latest report, statewide total home sales (which include single-family and condominiums) in October 2009 reached 10,986 homes sold, up 24.2 percent from October 2008 sales of 8,846. The Illinois median price in October 2009 was $157,000 down 7.6 percent from $170,000 in October 2008. The median is a typical market price where half the homes sold for more, half sold for less.

“October’s extraordinary sales totals reflect home purchases by many buyers who were sitting on the sidelines of the housing market waiting out the economic downturn as well as more home sellers coming to terms with accurate pricing given the market conditions,” said REALTOR® Mike Onorato, GRI, president of the Illinois Association of REALTORS®. “The first-time homebuyer tax credit clearly was a motivating factor and an effective market stimulus to reduce inventories and help stabilize prices. The good news is that the credit has been extended through April 2010 and expanded to now include potential move-up buyers who have owned a home for any consecutive five-year span during the last eight years.”

In the Chicagoland Primary Metropolitan Statistical Area (PMSA), year-over-year home sales were positive for the fourth consecutive month, up 33.3 percent to 7,286 homes sold (single-family and condominiums) in October 2009 compared to 5,467 homes sold in October 2008. The median home sale price for the Chicagoland PMSA was $190,000 in October 2009, down 15.6 percent from $225,000 in October 2008.

The monthly average commitment rate for a 30-year, fixed-rate mortgage for the North Central region was 5.0 percent in October 2009, down from the 5.06 average rate during the previous month, according to the Federal Home Loan Mortgage Corporation. Last year in October it averaged 6.25 percent.

“Sales continue to offer some encouraging news and there is an early indication of a cessation of price declines in Illinois,” noted Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “The volatility in a number of indicators on a month-to-month basis still makes it difficult to detect a longer-term trend. With interest rates at 5 percent for 30-year loans, housing supply strong, the uptick in sales should continue; however, many potential buyers have either too much debt or are unemployed precluding their participating in this buyers’ market.”

Illinois’ official unemployment rate in October reached 11.0 percent and was above the 10.2 percent national unemployment rate for the same month.

In the city of Chicago, October total home sales (single-family and condominiums) were up 28.5 percent to 2,012 sales compared to 1,566 homes sold in October 2008. The city of Chicago median price in October 2009 was $215,000 down 18.0 percent compared to $262,250 a year ago in October 2008.

“We are seeing increased movement in both the single-family unattached homes, as well as in Chicago’s condo market,” said Genie Birch, president of the Chicago Association of REALTORS® and a broker associate with Koenig & Strey GMAC, Chicago. “The first-time homebuyer tax credit has created a great incentive for buyers on the fence who are ready to invest in real estate. We are hopeful that the remainder of 2009 with the expanded and extended credit will continue to positively increase home sales in our market, however continued review of lending policies is also necessary, in order to assist credit-worthy homebuyers in their investments.”

According to the IAR report, total home sales (single-family and condominiums) comparing October 2009 to the same month in 2008 were up in 45 of 99 Illinois counties reporting including Champaign, up 19.7 percent; Cook, up 31.1 percent; DuPage, up 34.9 percent; Kane, up 34.8 percent; Kendall, up 51.0 percent; LaSalle, up 43.8 percent; Madison, up 42.2 percent; Peoria, up 3.4 percent; Rock Island, up 31.1 percent; Saint Clair, up 18.1 percent; Sangamon, up 36.8 percent; Will, up 57.4 percent, and Winnebago, up 6.1 percent.

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 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 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.

Find Illinois market stats data at www.illinoisrealtor.org, click on Market Stats

Contact:
Mary Schaefer/Ann Londrigan
217-529-2600