CHICAGO, U.S. HOME SALES FALL SUBSTANTIALLY IN JANUARY!
REGIONALLY, MIDWEST BUCKS NATIONAL TREND - BUT CHICAGO AREA SALES OFF 34%!
For the sixth month in a row, U.S. Home Sales fell in January, as did the national median home sales price. January, 2008 figures for units sold fell 0.4 percent over year-ago figures. The seasonally-adjusted annual projection of 4.89 Million Units represents the slowest sales pace since 1999. Many experts contend the steepest housing downturn since the early 1980's has yet to bottom out.
Across the nation, the January median home price fell 4.6% from January, 2007 - to $201,100, while theoretical levels of unsold home inventory now exceeds 10 months, on average, up from the 9.7 month average inventory in December of last year.
Here in the Chicago IL Metro Area, 3,926 homes and condos were sold in January, 2008 - down 34 percent from the 5,947 units sold in January of '07. The median price of a home in Chicago and the surrounding suburbs was $239,700 in January - considerably higher than the national and IL averages, but 2.2% lower than 2007.
Inventory levels in some parts of the City of Chicago and in many suburbs exceed two years, and the chances of selling a home within a normal six-month marketing time frame often no better than 1 in 5. (See our latest Chicago IL Real Estate Stats Pack, posted each Monday here on BlogChicagoHomes.com, for specific figures in the North and Northwest Side of Chicago Communities we serve most extensively).
In 2007, nationwide, sales of single family homes and condos fell 12.7% versus 2006. This represented the steepest decline in a quarter of a century, and a dip of about 20% from the all-time high sales figures set only three years ago, in 2005.
Michael Gregory, of BMO Capital Markets, is concerned. "With prices expected to continue dropping and banks leery to make loans, few prospective homeowners feel now is the time to buy."
Economist Joel Naroff believes many sellers are beginning to understand the weakness of today's real estate market, and will have to reduce their asking prices considerably to sell their homes. "With sales weak and inventories at extraordinarily high levels, prices are likely to fall a lot more," says Naroff.
Further analysis of the numbers indicate, nationally, that single-family home sales actually increased a slight bit in January. Weak sales of condos, however, brought down the overall numbers. Economic Analyst Patrick Newport of Global Insight observed that condominium prices, across the U.S., increased most sharply during the real estate boom between 2000 and 2005, but have failed to adjust downward during today's market shift. Buyers, he feels, are likely to sit on the fence before purchasing their new condo, feeling prices will soon drop significantly.
Read further details on today's numbers in today's Chicago Tribune, as well as in today's online edition of Crain's Chicago Business.
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