As low interest rates and the tax credit stimulus helped to reduce inventories through the end of 2009 and more markets reported median price increases in December, the Illinois housing market is beginning to show signs of stabilization.[IMAGE]
Totaling 8,197 transactions, statewide total home sales in December 2009 were up 20.1 percent from December 2008, according to the latest report by the ""Illinois Association of Realtors"":http://www.illinoisrealtor.org/ (IAR). This marked the fourth consecutive month of year-over-year increases in Illinois. For the year, Illinois home sales were down just 1.5 percent from total sales in 2008.
The report showed that home sales in December of last year were up in 50 of 99 Illinois counties, compared to December 2008. In addition, 50 percent of reporting counties also logged median price increases.
While many markets began reporting price increases in December, the statewide median home price was down 1.9 percent year-over-year to $152,000. Year-end data showed even more notable decreases. The median price for 2009 was $157,000, tumbling 14.6 percent from the year-end median price in 2008.
""Four consecutive months of sales increases and two months of median price increases in 40 precent to 50 percent of Illinois counties are all good signs that markets are stabilizing in some areas, although the overall economy must improve to see a full recovery in the housing market,"" said Mike Onorato, president of the IAR.
In particular, the city of Chicago saw huge increases in home sales in December 2009. Compared to December 2008, total home sales were up 39.8 percent to 1,768 transactions. However, for the year, homes sales in the city were down 7.4 percent. The Chicago median price in December was down 10.6 percent year-over-year, and the year-end median price was down 22.4 percent from 2008.
""In the city of Chicago, December closed with nearly a 40 percent increase in units sold over the same period in 2009, indicating that the correction of the marketplace continues as distressed properties are absorbed by investors, and stimulus credit homebuyers continue to pave their way to making their purchases,"" said Genie Birch, president of the ""Chicago Association of Realtors"":http://www.chicagorealtor.com/. ""We will continue to monitor closely the impact of the first-time homebuyer tax credit, as well as the evolving lending regulations, including FHA's new guidelines, as we serve Chicago's homebuyers in 2010.""
Onorato said the demand in 2009 was primarily for lower-priced homes from first-time buyers in addition to short sales and sales of foreclosed homes. Now, he said there is opportunity for move-up buyers to take advantage of the extended and expanded tax credit and lower mortgage interest rates, which many analysts expect to rise by mid-year.
""In the year ahead Realtors support continued programs to stem foreclosures and help people refinance or sell, as well as a focus on job creation and retention by state and local governments,"" Onorato said. ""As the economy improves so will the housing market.""
Dr. Geoffrey J.D. Hewings, director of the ""Regional Economics Applications Laboratory (REAL) at the University of Illinois"":http://www.real.uiuc.edu/, said the continuation of positive changes in annual sales data recorded in the last three months of 2009 is forecast to continue through the first quarter of 2010. In addition, he said there is evidence to suggest that median prices might be starting in inch upwards. In March 2010, the median price in Illinois is forecast to be just above the level recorded a year earlier, Hewings said.