Illinois housing market marks sixth months of home sales gains

IAR released its February home sales report on March 22 with statewide sales up for six consecutive months and home sales in the nine-county Chicagoland PMSA up for eight months running.

“We are encouraged by more signs of improvement in the Illinois housing market spurred by the tremendous buyer market conditions,” said REALTOR® Mike Onorato, GRI, president of the Illinois Association of REALTORS® and broker-owner of Onorato Real Estate in Coal City in the report. “This particular spring market really is the time for anyone thinking of buying a home in Illinois to make their move given the combination of low mortgage interest rates, affordable prices and the federal tax credit for first-time buyers and long-time homeowners, which ends April 30.”

February stats at-a-glance

  • Statewide total home sales – up 15.7%
  • Median price – down 3.6% to $135,000
  • Chicagoland PMSA* total home sales – up 32.0%
  • Median price – down 10.3% to $165,000

Here are some observations from the latest forecast from economist Geoff Hewings, director of the University of Illinois Regional Economics Applications Laboratory:

  • Month-to-month sales growth will be positive in March, April and May 2010; for Chicago, the range will be 5-25% while for Illinois that range will be from 5-30% with March the strongest months for both areas.
  • Median prices in Illinois and Chicago will fluctuate month-to-month, dropping in April but rebounding slightly in May.
  • Illinois’ unemployment rate increased to 11.3% in February, up slightly from 11.1% in January; the national rate stood at 9.7%.
  • Housing inventories, fueled by continuing additions of foreclosed properties continue to dampen housing price recovery in the Illinois and Chicago markets.
  • Congressional action on a jobs bill, an accelerating pace of housing mortgage adjustments and continuing but modest growth in some sectors of the economy present some positive signs for the economy.

The National Association of REALTORS® reported today existing-home sales declined slightly in February, with modest gains in the Northeast and Midwest offset by softer sales in the South and West. 

According to NAR economist Lawrence Yun: “The key test for a durable recovery comes in the next few months as the tax credit deadline approaches. If we see a surge in home buying comparable to last fall in the months leading up to the original tax credit deadline, then enough inventory should be absorbed to ensure a broad home price stabilization.”

NAR also reported distressed homes, generally sold at discount, accounted for 35 percent of sales in February and an NAR practitioner survey found first-time buyers purchased 42 percent of homes in February, up from 40 percent in January. Investors accounted for 19 percent of transactions in February, compared with 17 percent in January; the remaining sales were to repeat buyers.

* 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 Chicago PMSA, as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

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