August was a rough month for home sales in the Chicagoland area, according to new stats from IAR.
Home sales in the nine-county Chicagoland area fell 13.3 percent year-over-year in August, closing out the month at 10,370 sales, according to new analysis from the Illinois Association of Realtors.
Though inventory-related factors played a role, that 13.3 percent decline is the biggest such drop since June 2011. Meanwhile, median price for the area continued to rise, with August’s $215,00 representing a 9.1 percent increase from the $197,000 of Aug. 2013.
Foreclosure Inventory Blues
Geoffrey J.D. Hewings, the director of the Regional Economics Applications Laboratory of the University of Illinois, said that conventional sales are only slightly below last year’s levels. The big drop, he explained, came in Chicagoland’s distressed sales.
“The decrease (on an annual basis) in sales can be attributed to the decline in foreclosure sales; regular sales are almost at last year’s level,” Hewings said. “A re-estimate of the foreclosure inventory suggests it will be another 12-15 months before this inventory returns to pre-recession levels.”
Economic Factors Influence Housing
Specifically in the city of Chicago, sales were down 15.3 percent year-over-year, with the median price rising 10.2 percent to $270,000. Meanwhile, the Mainstreet Organization of Realtors (MORe) did not release home sales data for its 200 suburban communities, though it did report that the median price of single-family detached homes rose 8.9 percent.
Pradeep Shukla, the new president of MORe, said that housing continues to be impacted by outside economic factors (a point we’ve made consistently).
“Any suppression of consumer demand has largely come from other economic factors, such as continued instability in the employment market,” Shukla said. “For instance, we’re still seeing a prevalence of multigenerational homes, with young adults choosing to move back in with their parents while they look for work.”