February home sales in Illinois increased from last month while year-over-year comparisons still reflect an impact from the homebuyer tax credit incentive.
According to data from the Illinois Association of Realtors, statewide total home sales, including single family and condo sales, in February 2011 totaled 5,575 homes sold, an increase of 1.3 percent from 5,505 sales in January 2011 and down 10.0 percent from February 2010 sales of 6,194 homes.
The median price in February was $128,800, down 4.6 percent from $135,000 for the same month last year. The statewide single family median price reached $129,000, up 1.6 percent from $127,000 in February 2010 and up 2.8 percent from $125,500 in February 2009. The median is a typical market price where half the homes sold for more, half sold for less.
“We are seeing some improvements in the single family market in particular in terms of median prices trending higher and back to more sustainable pre-boom levels,” 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. “Another positive sign is more than half of Illinois counties reported median price increases or no change in February although markets permeated by distressed properties continue to be affected. The predominance of sales in lower priced tiers of the market also is reflected in the median price.”
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), total home sales (single family and condominiums) in February 2011 were down 8.8 percent, totaling 3,769 homes sold compared to February 2010 sales of 4,134 homes. Home sales were down 2.0 percent from the previous month’s totals of 3,844 in January 2011. The median price in February 2011 was $152,500 in the Chicago region, down 7.6 percent from $165,000 in February 2010.
The monthly average commitment rate for a 30-year, fixed-rate mortgage for the North Central region was 5.0 percent in February 2011, up from 4.8 percent during the previous month, according to the Federal Home Loan Mortgage Corporation. Last year in February, it averaged 5.01 percent.
“Sales are forecast to decline year-over-year for the next three months, but this is not an extremely negative signal for Illinois and the Chicago PMSA housing markets taking into consideration that the early 2010 housing market was inflated by the homebuyer tax credit by 16.5 percent” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “This impact is reflected in the fact that we are expecting to see significant month-to-month sales increases for the next three months for both Illinois and the Chicago PMSA. The housing price forecasts for both Illinois and the Chicago PMSA show month-to-month increases in March, April and May however the forecasted prices are still lower than last year during the same period.
“The economy continues to provide some positive signs,” he continued. “National job gains in the last 12 months have amounted to 1.3 million, or an average of 106,000 jobs per month. Illinois added 64,200 jobs in the last year or an average of 5,350 jobs per month. Most analysts agree that a strong labor market will be the key to a housing market recovery.”
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February from an upwardly revised 5.40 million in January, and are 2.8 percent below the 5.02 million pace in February 2010.
Lawrence Yun NAR chief economist, expects an uneven recovery. “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers,” he says. “This tug and pull is causing a gradual but uneven recovery. Existing-home sales remain 26.4 percent above the cyclical low last July.”
However, things seem to be swinging up, slowly but surely. In the city of Chicago, February home sales (single family and condominiums) totaled 1,056, up 2.1 percent from the previous month 1,034 homes sold in January 2011 and down 13.8 percent from 1,225 homes sold in February 2010.
The city of Chicago median price in February 2011 was $177,500 up 0.6 percent compared to $176,500 a year ago in February 2010; the single family median price increased 21.9 percent in the month of February to $134,200 from $110,100 in February 2010.
“In the city of Chicago, both average price and median price have increased for single family detached over the same period in 2010. Buyers are finding significant value and gravitating toward the single family detached properties offering better financing options,” said Mabel Guzman, president of the Chicago Association of Realtors and a Realtor with Envision Real Estate LLC, Chicago. “Currently 90 percent of loans are government-sponsored enterprises, and with a 30 percent cap on condominium buildings qualified buyers are finding it more challenging to secure financing for their condo purchase. We are closely monitoring short sales in the city of Chicago, which are outpacing foreclosures, in order to track impact on communities throughout the city.”
More than half of Illinois counties reporting (49 of 97 counties) showed year-over-year median price increases or no change for the month of February including Adams, up 6.5 percent to $104,950; Champaign, up 8.4 percent to $126,000; Madison, up 15.7 percent to $109,950; McLean, up 2.0 percent to $153,000; Monroe, up 21.2 percent to $157,500; Sangamon, up 0.3 percent to $120,300; Tazewell, up 1.5 percent to $115,450; and Will, up 2.4 percent to $163,900.
Sales and price information is generated from a survey of Multiple Listing Service sales reported by 35 participating Illinois Realtor local boards and associations including Midwest Real Estate Data LLC for the period Feb. 1 through Feb. 28, 2011. The Chicagoland PMSA, as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.