The Market is Down

The August sales and price statistics are out from the Illinois Association of Realtors and show further declines in the city in both sales and median price. Chicago appears to be struggling to increase sales more than the total Chicagoland area.

The first-time home buyer credit boosted sales for the month. The IAR also states that foreclosures and short sales continue to put downward pressure on prices.

From the Illinois Association of Realtors:

In the city of Chicago, August total home sales (single-family and condominiums) totaled 1,928, down 7.2 percent from 2,078 homes sold in August 2008. The city of Chicago median price in August 2009 was $229,476, down 22.9 percent from $297,500 a year ago in August 2008.

“Homebuyers continue to be active, and the absorption of distressed inventory is the reason the number of units sold in August 2009 is nearly the same as this time last year. Still, the housing market in the Chicagoland area is far from robust, as most home sellers will attest. We strongly advocate for an extension and expansion of the American Recovery and Reinvestment Act’s first-time homebuyer tax credit program, broadened to include all buyers and favoring no taxpayer over another,” said David Hanna, president of the Chicago Association of REALTORS®.

“Here in Chicago the move-up buyer and those with higher incomes are facing a number of additional financial and procedural obstacles that must be addressed.”

Sales were actually higher by 1.3% year over year in the 9-county Chicagoland area as 7,009 homes sold in August compared to 6,917 in August of 2008.

“The Internal Revenue Service recently reported the $8,000 first-time homebuyer tax credit has provided a tax benefit to more than 1.4 million people to date. REALTORS® are urging Congress to extend the tax credit beyond the fast-approaching deadline of December 1 so more people can take advantage of it,” said Onorato, broker-owner of Onorato Real Estate in Coal City. “Also just now gaining awareness is the Illinois Home Start program, which offers eligible first-time buyers a short-term no-interest loan of up to $6,000 for the down payment in anticipation of the tax credit. With more time, these programs can really help sidelined homebuyers.”

According to Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois: “The size of the unsold housing inventory continues to make this a buyers’ market with an approximate value of nine months for Illinois and almost 11 months for Chicago at current sales rates. Absent an uptick in sales, it is unlikely that prices will recover much before the middle of 2010.”

August Illinois Home Sales Strong at the Entry Level, Statewide Median Price at $165,000 [Press Release, Illinois Association of Realtors, Sep 24, 2009]