CHICAGO AREA HOME SALES PLUNGE SINCE 2007, But Recent Picture Here Improving!
IN CHICAGO METRO AREA, HOME, CONDO SALES UP 13.7% APRIL-MAY, 2008!
Is there a bottom in sight to the 2007-2008 downturn of the Chicago Real Estate Market? Perhaps, say some experts, but they do not predict a fast turnaround.
Overall, combined sales of Single Family Homes and Condos in the nine counties that surround Chicago - Cook, DuPage, Lake, Will, McHenry, Kane, Grundy, Kendall, and DeKalb - fell 29 percent for the one-year period ending in May, 2008. Median sales prices were fairly stable over the same period in the Chicago Metro Area - dropping only 0.5% during the same period. The current median here - $251,000.
Statewide, across Illinois, sales dropped 22.9 percent over the last twelve months, ending in May, while prices dropped statewide by 7.3%, to a median of $190,000. Illinois sales, outside of the Chicago Area, were up 17.3% in May, compared to April, 2008. 11,173 houses were sold across Illinois in May, versus 9,523 in April.
The Chief Economist of the National Association of Realtors, Lawrence Yun, feels the underlying fundamentals indicate some pent-up demand nationwide. "Home sales are at about the same level as they were 10 years ago, yet the population has grown by 25 million people and we have over 10 million more jobs," he said.
"The housing market has been under performing by historical standards, partly because buyers were hampered by mortgage availability issues, but that's improved and an upturn is likely."
In the opinion of Kay Wirth, President of the Illinois Association of Realtors, "The Illinois housing market showed some positive signs of stabilizing in May, with a sizable jump in sales from the previous month and the fourth consecutive month-to-month increase."
Many economists surveyed feel the soft economy will stall a housing sector rebound in the near future. Others, however, are somewhat more optimistic.
"I think we are close to a bottom," says Lehman Brothers Holdings Economist Michelle Meyer. "Sales will probably fall another 5 percent or 10 percent before bottoming by the end of the summer. It will be a feeble recovery, we will kind of bounce along the bottom."
Inventory of homes for sale exceeds 27 months in the North and Northwest Side of Chicago Neighborhoods we serve extensively. Here, the supply is over four times the generally-accepted stable-market level of 6 months supply. Although inventory levels closer to Downtown Chicago and The Loop are far lower - just over 14 months in The Loop and Near North Neighborhoods of Chicago. (Data drawn from Chicago MLS Statistics).
On Wednesday, the Federal Reserve predicted that housing contraction will likely dampen economic growth into next year.
"It's going to be a long, painful end" to the housing industry's decline, says Mark Zandi, Chief Economist at Moody's Economy.com, West Chester PA. "Prices have come down enough that affordability has been restored in some markets and we're starting to see some buyers come back in."
Apparently, data around Chicago indicates that some home buyers are beginning to jump off the fence and buy new homes. However, market balance in our area may still be many months away.
See further coverage in yesterday's Chicago Tribune, by its staff reporters.
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