Homes sales for Illinois and Chicago were all sunshine and happiness in January, though troubles may loom ahead.
Year-over-year homes in Illinois increased 16.1 percent in January to 6,435 homes, the strongest showing for the embattled housing market since 2007, according to data released today by the Illinois Association of Realtors (IAR).
Loretta Alonzo, the president of IAR, said that historically low interest rates, coupled with employment gains and housing affordability, contributed to the big increase in sales.
“Whether you’re a seller or a buyer, there are positives to this data,” Alonzo said. “After years of standing on the sidelines, buyers are finding this is the right time to get into affordable housing. While sellers may not be getting all of the money they want for a house, they are getting traffic and interest at levels that haven’t been seen in several years.”
The statewide median price in January was $122,500, down 9.3 percent from $135,000 in January 2011.
Sales in the nine-county Chicago Primary Metropolitan Statistical Area were similarly positive, rising 15.7 percent from January 2011. As with Illinois’ sales, though, the median price in January 2012 did decline by 11.4 percent from last year.
For just the city of Chicago, January 2012 home sales were up 5.7 percent year-over-year, and prices were down just 0.7 percent.
Bob Floss, president of the Chicago Association of Realtors, said the relatively mild winter of 2012 has influenced sales.
“January gave 2012 a solid start in sales of homes in the city of Chicago,” Floss said. “Motivated buyers and sellers moving in what has been a mild Chicago winter has helped move both distressed and traditional properties. We will be closely watching the impact of pricing on the market and how homebuyers and investors react to what could be a new norm.”
And that “new norm” that Floss refers to will shape the market going forward, according to comments by Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory of the University of Illinois, especially in light of the mortgage settlement.
“Now that the major legal bottlenecks for processing foreclosed properties appear to have been resolved, it is likely that these properties will assume a significant share of sales in 2012,” Hewings said. “This provides mixed news for the housing market; it is positive in the sense that the large backlog can now begin to be removed from the inventory. However, it is likely to continue to dampen any prospect of near-term housing price recovery.”