August Illinois Home Sales Strong at the Entry Level
Statewide Median Price at $165,000
SPRINGFIELD, Ill. — Record low mortgage interest rates, favorable prices at the entry level, and the first-time homebuyer tax credit propel home sales in August. According to the Illinois Association of REALTORS® latest report, statewide total home sales (which include single-family and condominiums) in August 2009 reached 10,595 homes sold, down 3.0 percent from August 2008 sales of 10,923. The Illinois median price in August 2009 was $165,000 down 14.8 percent from $193,750 in August 2008. The median is a typical market price where half the homes sold for more, half sold for less.
“August proved a strong month for sales, particularly in the single-family market, as we move through inventories mostly for entry-level, lower-priced homes spurred by attractive interest rates, some improvement in consumer confidence and the first-time homebuyer tax credit,” said REALTOR® Mike Onorato, GRI, president of the Illinois Association of REALTORS®. “Foreclosures and short sales continue downward pressure on prices. A full recovery in the housing market hinges on relief on the foreclosure front, more jobs and more housing stimulus.”
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), year-over-year home sales were positive for the second consecutive month, up 1.3 percent to 7,009 homes sold in August 2009 compared to 6,917 homes sold in August 2008. The median home sale price for the Chicagoland PMSA was $205,000 in August 2009, down 18.7 percent from $252,000 in August 2008.
“The Internal Revenue Service recently reported the $8,000 first-time homebuyer tax credit has provided a tax benefit to more than 1.4 million people to date. REALTORS® are urging Congress to extend the tax credit beyond the fast-approaching deadline of December 1 so more people can take advantage of it,” said Onorato, broker-owner of Onorato Real Estate in Coal City. “Also just now gaining awareness is the Illinois Home Start program, which offers eligible first-time buyers a short-term no-interest loan of up to $6,000 for the down payment in anticipation of the tax credit. With more time, these programs can really help sidelined homebuyers.”
According to Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois: “The size of the unsold housing inventory continues to make this a buyers’ market with an approximate value of nine months for Illinois and almost 11 months for Chicago at current sales rates. Absent an uptick in sales, it is unlikely that prices will recover much before the middle of 2010.”
The monthly average commitment rate for a 30-year, fixed-rate mortgage for the North Central region was 5.27 percent in August 2009, down 0.25 from the 5.52 average rate during the previous month, according to the Federal Home Loan Mortgage Corporation. Last year in August it averaged 6.52 percent.
Illinois’ official unemployment rate in August reached 10.0 percent and was above the 9.7 percent national unemployment rate.
In the city of Chicago, August total home sales (single-family and condominiums) totaled 1,928, down 7.2 percent from 2,078 homes sold in August 2008. The city of Chicago median price in August 2009 was $229,476, down 22.9 percent from $297,500 a year ago in August 2008.
“Homebuyers continue to be active, and the absorption of distressed inventory is the reason the number of units sold in August 2009 is nearly the same as this time last year. Still, the housing market in the Chicagoland area is far from robust, as most home sellers will attest. We strongly advocate for an extension and expansion of the American Recovery and Reinvestment Act’s first-time homebuyer tax credit program, broadened to include all buyers and favoring no taxpayer over another,” said David Hanna, president of the Chicago Association of REALTORS®. “Here in Chicago the move-up buyer and those with higher incomes are facing a number of additional financial and procedural obstacles that must be addressed.”
According to the IAR report, total home sales (single-family and condominiums) comparing August 2009 to the same month in 2008 were up in 32 of 99 Illinois counties reporting including Adams, up 5.8 percent; Boone, up 6.2 percent; Cook, up 0.7 percent; DeKalb, up 33.6 percent; DuPage, up 5.7 percent; Kendall, up 12.5 percent; Logan, up 30.8 percent; Rock Island, up 24.8 percent; and Sangamon, up 17.3 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 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 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.