Chicago sales are down in September

From the Illinois Association of Realtors:

In the city of Chicago, September total home sales (single-family and condominiums) were down 26.9 percent to 1,403 sales compared to 1,918 homes sold in September 2009. The city of Chicago median price in September 2010 was $180,000, down 20.0 percent compared to $225,000 a year ago in September 2009.
Year-to-date sales remain up 11.1 percent January through September 2010 with 15,285 sales compared to 13,760 home sales for the same period in 2009. The year-to-date median sales price for the city of Chicago is down 7.9 percent to $210,000 from $228,000 for 2009.

 Here is the recap of September sales over the prior 4 years.

• September 2010: 1403- median price of $180,000
• September 2009: 1918
• September 2008: 1813
• September 2007: 2108- median price of $267,750

“Distressed properties are driving sales, putting pressure on the overall median price of homes sold in today’s market. A positive indicator that our market is moving as it should can be seen with a steady pace of units sold and existing inventory being absorbed,” said Mabel Guzman, president of the Chicago Association of REALTORS® and a REALTOR® with Su Familia Real Estate, Chicago. “With condo sales in the city of Chicago up over 11 percent year-to-date from the same period in 2009, we see an expansion of choices for potential buyers to jump in the market now and find great value for homes they may have not otherwise been able to afford.”

The expiration of the tax credit has also squelched demand.

“It’s clear the housing market benefited from the tax credit through the first half of the year and now we are feeling the withdrawal symptoms in the form of slower sales. Still this extraordinary buyer opportunity should continue as mortgage rates remain in rock-bottom territory as they were just last week averaging 4.19 percent for our region,” said REALTOR® Sheryl Grider Whitehurst, ABR, CRB, GRI, president of the Illinois Association of REALTORS® and the Development and Operations Coordinator for Traders Realty in Peoria. “Bottom line, home sales will struggle until jobs return to the economy, consumer confidence improves and foreclosures work their way through the system.”

We’ve also chattered about how continued high unemployment will put pressure on the housing market.  The Illinois unemployment rate was still 9.9% in September, though that was down 0.2% from the year before.

“The slow pace of employment recovery is certainly dampening housing demand,” said Geoffrey J.D. Hewings, the Director of the Regional Economics Applications Laboratory at the University of Illinois. “In particular there is increasing concern that an employment rebound may not occur to any significant degree until late 2011. Forecasts for Illinois unemployment over the next 12 months continue to reflect the uncertainty in the economy; job growth is anticipated to be between a positive 24,000 and a negative 31,000.”

WOW, you did sign on the dotted line....

WOW, you did sign on the dotted line....
This is from the Chicago Tribune.

In the eight-county Chicago area, 19 percent of mortgages — representing nearly 1 in 5 residential properties with a loan — are delinquent by at least one month, helping create an inventory of almost 204,000 homes at risk of reverting back to lenders, according to data provided to the Chicago Tribune by John Burns Real Estate Consulting in Irvine, Calif. That “shadow inventory,” as experts define distressed homes not yet put up for sale, is the largest in absolute terms for any metropolitan area in the country.
Based on its calculations, the firm believes that 80 percent of those homeowners eventually will lose their property, either through foreclosure or a short sale, in which the lender permits the home to be sold for less than the value of the loan.
For Cook, DeKalb, DuPage, Grundy, Kane, Kendall, McHenry and Will counties, the shadow inventory number translates to 22 months of distressed housing supply. The combined shadow inventory for Lake County and Kenosha County, Wis., where the delinquency rate is 18.4 percent, is more than 22,000 homes, or a 23-month supply.
“A fifth of people (in the Chicago area) aren’t paying their mortgage,” said Wayne Yamano, a vice president at John Burns. “Next year is when you’re going to have the most competition in the market and the proportion of distressed sales will be the highest.”