This year’s Illinois Association of Realtors second quarter report shows home sales are down 18 percent from last year and the median home price of $142,000 is also down 11.3 percent from $160,000 in the second quarter of 2010. These results, however, are up significantly from the same period when compared to 2009.
In the Chicago Primary Metropolitan Statistical Area (PMSA), home sales also dropped 16.6 percent in the second quarter when compared to 2010, but the sales are up 34.7 percent from the second quarter of 2009. In the city of Chicago, total home sales were down 23.7 percent to 5,010 sales compared to 6,567 sales in the second quarter of 2010. But when compared to 2009, sales were up 32.8 percent.
“In the city of Chicago, second quarter 2011 sales of both single-family and condos are more reflective of 2009, with 5,010 units sold in the second quarter 2011, versus 4,945 during the same period in 2009 and 6,567 in 2010. While both 2009 and 2010 included federal tax incentives, second quarter 2010 was a hyper-incentivized market, where buyers knew an extension was highly unlikely,” said Mabel Guzman, president of the Chicago Association of Realtors and a Realtor with Envision Real Estate LLC, Chicago. “As long as units are healthily absorbed and qualified buyers can access affordable loan products, an opportunity exists for a recovery, with distressed assets remaining manageable.”
J.D. Hewings, director of the regional economics applications laboratory (REAL) of the University of Illinois, explains that results will be more accurate next quarter.
“The third quarter of 2011 will be a good time to check the recovery status of the housing market, recalling that the third quarter of 2010 was a period in which the effect of the housing stimulus program faded away,” Hewings said. “Six out of 10 Illinois metropolitan statistical areas are forecast to have positive annual median price changes in the third quarter. The positive annual median price changes are a sign for recovery of some housing markets.”
According to the Federal Home Loan Mortgage Corporatin, the second quarter 2011 interest rate for 30-year, fixed-rate mortgages was 4.69 percent, down from the first quarter in 2011 and down from the second quarter in 2010. However, consumers are still weary of purchasing homes or still cannot afford a down payment and it could get worse.
“Realtors are telling Congress that a measure federal regulators are considering to require a 20 percent down payment to purchase a home would make homeownership absolutely out of reach for many who are ready and able to make that step to homeownership,” said Realtor Sheryl Grider Whitehurst, ABR, CRB, GRI, president of the Illinois Association of Realtors and a managing broker for Traders Realty in Peoria. “For a $142,000 home purchase, which is the second quarter statewide median price, having $28,400 in the bank for the down payment is a tough hurdle for most people looking in that price bracket.”