First-Quarter Home Sales Offer Reason to Celebrate

Suburban and Chicago real estate saw a huge boost in first-quarter sales this year, thanks in large part to the Federal Homebuyers Tax Credit.
According to the Illinois Association of Realtors (IAR), the city of Chicago marked the biggest increase, with the sale of existing homes up 41.6 percent in the first quarter of this year compared to the same quarter last year.
In the surrounding Chicago area, first-quarter home sales rose 36.7 percent over last year’s numbers.
“It’s clear the tax credit helped stabilize the housing market with sales trimming down inventories and price declines moderating; notably, single-family home prices in the first quarter were up 1.5 percent statewide from a year ago,” said Mike Onorato, IAR president and broker-owner of Onorato Real Estate in Coal City. “We anticipate strong sales numbers through June even with some urgency removed after the tax credit. Low mortgage interest rates and affordable home prices should continue to attract buyers.”
So, let’s talk about those affordable home prices. Even though sales were up, housing prices continue to be down across much of Illinois. In Chicago, the median price was $196,000 in the first quarter of 2010, down 8.8 percent from $215,000 during the same period of 2009, and in the Chicagoland area, the median price was $175,500, down 6.4 percent from last year’s figure of $187,500.
But home prices did rebound in some areas of the state. Total home sales in the first quarter of 2010 compared to 2009 were up in 54 of 99 Illinois counties, and 43 of those 99 counties also saw a median price increase, including: Lake, sales up 34 percent, median price up 2.7 percent; Grundy, sales up 1.2 percent, median price up 4.3 percent; and LaSalle, sales up 18.7 percent, median price up 9.3 percent.
So what’s going to happen now that the tax credit has expired?
“Forecasts for the next three months of April, May and June indicate sales increasing statewide in the 10 to 25 percent range and in the Chicagoland region in the 15 to 40 percent range compared to a year ago,” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “Median prices will move upward adding almost $13,000 in Illinois and $16,000 in the Chicagoland region over the three months.”
From your lips …