Hot Housing Accompanies Warm Winter in Chicago and Illinois

by Chicago Agent

Year-over-year home sales in both Illinois and Chicago posted big increases.

Home sales in Illinois were up by 14 percent year-over-year in December, a result of a mild winter, record-low interest rates and the most affordable housing market in 40 years, according to new data from the Illinois Association of Realtors (IAR).

According to the IAR, 8,828 homes were sold in December in the sixth straight month of home sale increases, with statewide median price at $125,500, a 10.4 percent decline from December 2010.

Loretta Alonzo, the president of the IAR, said that though he remains concerned about prices, the high sales and confident consumes in 2011 pose excellent signs for 2012.

“While median home prices continue to be a concern in much of the state, the continued trend of month-over-month increases in the number of home sales is encouraging news,” Alonzo said. “Buyers are finding deals that are simply too good to pass up, and that coupled with stronger consumer optimism is making this an excellent way to start 2012.”

For 2011 on the whole, sales were virtually even with 2010, down just 0.1 percent, with median sale price down 9.2 percent.

Sales were similarly encouraging for Chicago. In the nine-county area, sales rose by 17.0 percent year-over-year, while in the city itself, sales were up 6.4 percent. The nine-county median sales price was down 13.6 percent, the highest decline of those measured by the IAR, but the city’s price decline was the lowest at 6.2 percent.

Bob Floss, the president of the Chicago Association of Realtors, echoed Alonzo’s previous statement, saying that though prices remain an issue, the signs seem to suggest a positive 2012.

“December ended the year with an optimistic showing of buyers coming out and making decisions about investing in a home,” Floss said. “While the year-end numbers for 2011 were down over 2010, a positive uptick in sales toward the end of the year is a great indicator of a strong winter and spring season for buyers and sellers, alike, looking to get off the fence. Still problematic is the downward pressure distressed properties are putting on the market and a trend we will continue to monitor this year as we observe changes in median pricing throughout the city.”

For all of 2011, sales for the nine-county area were up 1.3 percent but down 7.2 in the city when compared to 2010.

Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois, said there are signs that the economy is improving, though unresolved foreclosures continues to hinder the market.

“Housing market forecasts for January, February and March 2012 for Illinois and the Chicago PMSA suggest that sales volume will be significantly higher than the same period last year, although prices will still be lower than a year ago,” Hewings said. “Until these foreclosed properties and additions expected in 2012 clear the market, sustained upward movement in prices will be unlikely.”

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