Tax credits, affordability drove Illinois home sales in 2010
SPRINGFIELD, IL – January 19, 2011 – (RealEstateRama) — First-time buyers continued to be a driving force in the Illinois housing market as they took advantage of the first-time homebuyer tax credit and the most affordable housing market in years, according to the 2010 Profile of Illinois Home Buyers and Sellers. The survey results released by the Illinois Association of REALTORS® (IAR) found 53% of buyers were first-time buyers, compared to 50% nationwide (a figure which has averaged closer to 40% nationwide since 2001).
“The strong buyer’s market continued in 2010 as first-time buyers accounted for an even larger share of the Illinois market – 53 percent compared to 51 percent in Illinois the year before,” said Sheryl Grider Whitehurst, ABR, CRB, GRI, president of the Illinois Association of REALTORS. “The combination of record-low interest rates, the federal homebuyer tax credit and affordable home prices created the perfect buying opportunity for many buyers.”
When asked about the primary reason for timing of the home purchase, 34% of buyers who responded to the survey said it was just the right time while (27%) cited affordability. Additionally, 72 percent of Illinois buyers took advantage of the homebuyer tax credit that expired last year, according to the survey.
The median age of first-time buyers in Illinois was 30 years old, while the typical repeat buyer was 42 years old. Single females accounted for 22 percent of buyers, up from 21 percent the year before. Single males stayed steady at 11 percent.
The median income was $67,000 among first-time buyers and $85,400 among repeat buyers. Fifty-one percent (51%) of first-time buyers used Federal Housing Administration (FHA) financing compared to 37% who used a conventional loan to finance their home purchase. Out of all buyers, 38% used FHA and 50% obtained a conventional loan.
New home purchases were at the lowest level in nine years nationwide—down to 15 percent of all recent home purchases. This is reflective in Illinois—9 percent of homes were new. Sixty-eight percent (68%) of all buyers purchased a detached single-family home, 17% an apartment/condo and 10% a townhouse. Nine percent (9%) purchased a short sale property and 4 percent purchased a home in foreclosure.
In the Illinois survey when considering the purchase of a home, commuting costs were considered very or somewhat important by 85 percent of buyers. Other factors influencing home choice were quality of the neighborhood (65%), convenient to job (62%), overall affordability of homes (46%) and convenient to friends and family (47%). The typical Illinois buyer searched for 12 weeks and viewed 15 homes.
“Even in today’s digital age, consumers find value in working with a real estate professional from the time they first begin their search up until they close on their new home. That’s reflected in the fact that 85 percent of Illinois buyers purchased their home through a real estate agent or broker,” said Whitehurst, development and operations coordinator for Traders Realty in Peoria.
Four percent (4%) of remaining buyers purchased their home through a builder, 7 percent through the previous owner and another 4 percent through a foreclosure or trustee sale, according to the report.
And what were the top three benefits of working with a real estate agent? Illinois buyers said agents helped them understand the complex real estate buying process, pointed out unnoticed features and faults in the property and helped them negotiate better sales contract terms.
The Illinois report found 92% of buyers in Illinois used a real estate agent as an information source in the home search with nine in 10 buyers also using the Internet to search for homes. Fifty percent (50%) of buyers found their agents through a referral from a friend or family member.
Ninety-five percent (95%) of buyers financed their recent home purchase. The typical buyer financed 88% of their home purchase. Nearly half (48%) of buyers reported they have made some sacrifices to purchase a home such as reducing spending on luxury items, entertainment or clothing.
Eighty-two percent (82%) of Illinois sellers were assisted by a real estate agent when selling their home. Recent sellers typically sold their homes for 94% of the listing price, and 62% reported they reduced the asking price at least once. Thirty-eight percent (38%) of sellers offered incentives to attract buyers, most often assistance with home warranty policies and closing costs.
The typical Illinois home seller owned their home for eight years and said the primary reason for selling the previous home was a change in family situation (23%) or the size of the home was too small (21%).
Information in the survey was obtained by the National Association of REALTORS® in a survey mailed to a sample of consumers who purchased homes between July 2009 and June 2010.
For more information, visit www.illinoisrealtor.org.
Contact:
Mary Schaefer/Ann Londrigan
217-529-2600
