More optimism for 2010 housing market, effects of recession linger

“Overall compared to the sort of forecasts we were producing this time last year the outlook is much better for the Illinois housing market and we will begin to see the starts of some sustained pick-ups month after month in the positive range, whereas in 2008 there was much more fluctuation with one month up, the next down,” said economist Geoff Hewings, director of the University of Illinois Regional Economics Applications Laboratory (REAL) in his 2010 Illinois Housing Market Forecast released today by the Illinois Association of REALTORS®.

More optimism in terms of year-over-year home sales increases is projected in 2010 while the declines in median prices continue but at a lower rate of decline.

“The downward trends that we’ve been watching over the last year and a half are beginning to bottom out,” said Hewings. “While we are more optimistic about 2010, we are clearly still suffering the effects of the recession and they are likely to continue well into 2010 and 2011.”

The most critical factor for housing in 2010 is what happens to employment.

Said Hewings:People who have jobs are becoming much more risk-averse to buying a more expensive house; for one they worry will they keep their job and two, can they sell the existing home? As consumer confidence in the economy is restored, then it is likely that a more robust rebound in sales will occur; in the interim, a high percentage of the housing transactions will be from households relocating as a result of job changes and, with the continuing aging of the Illinois and U.S. populations, there will be housing sales as a result of retirements.”

Find the 2010 forecast video series by Dr. Hewings including segments on the outlook, jobs and wildcard factors at www.illinoisrealtor.org, click on Market Stats.

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