First-time buyers are driving the rebound in sales and helping to put a dent in the inventory of homes on the market.
According to the Illinois Association of REALTORS® home sales report issued today, total home sales (single-family and condominiums) were up 3.3 percent statewide compared to September 2008—the first year-over-year sales increase since March 2006.
This is good news for the still-fragile housing market and shows why extending the federal first-time buyer tax credit is key to a full recovery, which will ultimately help the overall economy. Cleary it’s working and more people need time to take advantage of the program, which expires November 30. Time is running out with just over a month to go.
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), home sales were up for the third consecutive month. Sales were concentrated at the entry-level lower-priced homes and this scenario combined with sales of distressed properties continues to put downward pressure on prices. Price declines have moderated, however. The median price in Illinois was down 9.3 percent, Chicagoland PMSA down 10.8 percent.
In the city of Chicago, home sales were up for the first time since May of 2006.
Some areas of note
Sangamon County, home to the State Capitol in Springfield, saw home sales increase 13.5 percent with a median price increase of 1.8 percent. In Kankakee County, home sales rose 2.9 percent in September and the median home price increased 5.0 percent.
Six out of nine counties in the Chicagoland PMSA reported sales increases (Cook, DuPage, Kendall, Lake, McHenry and Will). DeKalb, Grundy and Kane counties reported sales declines.
Jobs remain a concern
The Illinois unemployment rate reached 10.5 percent in September, higher than the national rate of 9.8 percent. In his forecast for IAR, economist Geoff Hewings, director of the University of Illinois Regional Economics Applications Laboratory (REAL) says: “Prospects of a jobless recovery from the recession will continue to exert restraint on a more robust recovery of the housing market. Illinois tends to enter recessions later than the U.S. and take longer to recover.”