Illinois housing market forecast to reach 2011 annual peak in July

According to the Illinois Association of REALTORS® (IAR) June home sales report, statewide home sales (including single family and condominiums) in June 2011 totaled 11,003 homes sold, up 12.7 percent from 9,761 sales in May 2011; sales were down 16.3 percent from 13,144 homes sold in June 2010.

The statewide median price in June was $150,000, up 7.1 percent from $140,000 in May 2011 and down 11.7 percent from last year in June when it was $169,900. The median is a typical market price where half the homes sold for more, half sold for less.

“The housing market has seemed poised for some modest rebound for a number of months—foreclosure activity is down, interest rates are very low and the variety of properties for sale is extensive—yet the economy appears unable to mount a sustained recovery and this has dampened consumers’ confidence,” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois, in the REAL forecast. “Consumers are also unimpressed by the ability of the federal government to come to agreement on the deficit and raising the debt ceiling, diverting attention from the major issue of regenerating the U.S. economy.”

Adds Hewings: “The forecasts indicate that the housing market will reach its 2011 annual peak in July. Comparing the housing market in 2011 with 2010, the sales volume in the third quarter of 2011 is expected to surpass the third quarter of 2010 by 30 percent. This means the effect of the homebuyer tax credit will finally fade out in Illinois starting July 2011; some of the increase in the annual sales can be attributed to the significant decline that took place in 2010 when the effect of the withdrawal of the housing credit resulted in a sharp drop in housing sales for several months in a row.”

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