Strong Affordability Continues in Illinois First Quarter Housing Market

SPRINGFIELD, IL – May 10, 2011 – (RealEstateRama) — Illinois home sales in the first quarter of 2011 reflect the variety of housing opportunities available at attractive prices across the state with close to 70 percent of homes sold priced below $200,000. According to the Illinois Association of REALTORS® (IAR) first quarter 2011 report, Illinois home sales (which include single-family homes and condominiums) totaled 18,940 in the first quarter, down 11.2 percent from 21,320 home sales in the same period a year ago while up significantly by 24.0 percent from the same period in 2009 when just 17,194 homes were sold. The first quarter statewide median home sale price was $131,175, down 8.9 percent from $144,000 in the first quarter of 2010. The median is a typical market price where half the homes sold for more, half sold for less.

“Sales in the first quarter slowed from the same period a year ago given the absence of the federal tax credit that was in full swing last year. There is positive news to be found in the double-digit sales growth from the first quarter of 2009 and news from an economic standpoint that we are seeing trending growth in the median sales price month-to-month,” 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. “Affordability conditions reached a peak in the first quarter prompted by the low interest rates, and these ideal conditions should continue for the spring selling season with lower pricing making housing more affordable for buyers who are eager to purchase property.”

Adds Whitehurst: “As companies do more hiring and the economy grows stronger so will the housing market and that will benefit the many industries and jobs inter-connected to housing, as a recent study by Chicago-based RCF Economic and Financial Consulting shows. The sale of just one home in Illinois produces $28,581 in expenditures made by buyers and sellers in the transaction with a total annual impact of $7.9 billion in direct and indirect expenditures across the Illinois economy.”

The 1Q11 interest rate for 30-year, fixed-rate mortgages averaged 4.89 percent in the North Central Region, according to the Federal Home Loan Mortgage Corporation. It was up from 4.44 percent in the fourth quarter of 2010 but down from 5.03 percent a year ago in 1Q10.

“Recall that for this quarter last year the influence of the federal housing incentive program was at its peak, with housing sales elevated over the levels recorded the previous year. However, there was little influence on prices,” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “For once there appears to be some encouraging news. The year-over-year changes by month suggest a moderation of price declines for most regions of the state.”

Adds Hewings: “Since the beginning of the recession in December 2007 Illinois has posted negative job changes 27 times and positive job gains 12 times so far. The state of Illinois now has a net loss of 315,200 jobs since the beginning of the recession.”

In the Chicagoland Primary Metropolitan Statistical Area (PMSA) total home sales (single-family and condominiums) were down -9.9 percent in the first quarter of 2011 to 12,937 homes sold compared to 14,364 home sales in the same period a year ago while up 36.7 percent from the first quarter of 2009 when 10,507 homes were sold. The region’s first quarter 2011 median price was $155,000, down 11.7 percent from $175,500 in the first quarter of 2010.

Forty-six of 99 Illinois counties reporting showed year-over-year median home price increases or no change for 1Q11 including Champaign, up 3.0 percent to $134,000; Iroquois up 13.5 percent to $59,000; Jo Davies, up 11.7 percent to $162,000; Knox, up 25.0 percent to $75,000; Macon, up 8.3 percent to $81,250; Madison, up 2.9 percent to $106,000; Peoria, up 0.5 percent to $95,000; Vermilion, up 25.9 percent to $55,000; and Will, up 3.1 percent to $165,000.

In the city of Chicago, total home sales (single-family and condominiums) in the first quarter were down 16.5 percent to 3,540 sales compared to 4,241 sales in the first quarter of 2010; sales were up 41.6 percent compared to first quarter home sales of 2,995 in 2009. The city of Chicago median price in the first quarter was $180,000 down 8.2 percent from $196,000 in the same period for 2010.

“We are seeing a market in its infancy of recovery as median prices are narrowing, year over year. We see a healthy comparison of units sold in the first quarter 2011 when 3,540 units sold versus the same period in 2009 when 2,995 units sold in the city of Chicago,” said Mabel Guzman, president of the Chicago Association of REALTORS® and a REALTOR® with Envision Real Estate LLC, Chicago. “Sellers should consider a competitive price will keep their home on the market, a compelling price will get it sold.”

Sales and price information is generated from a survey of Multiple Listing Service sales reported by 35 participating Illinois REALTOR® local boards and associations including Midwest Real Estate Data LLC for the period January 1 through March 31, 2011. 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 Illinois Association of REALTORS® is a voluntary trade association whose 44,000 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 2011 Illinois home sales data and the REAL forecast can be accessed from the IAR website, www.illinoisrealtor.org/marketstats.

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