Illinois Home Sales Slip After a Year of Gains

Home sales activity in Illinois paused in July after nearly a year of home sale gains statewide. The lull is reported to be caused by the rush to meet the homebuyer tax credit deadline combined with weak job and economic reports.
[IMAGE] According to the ""Illinois Association of Realtors"":http://www.illinoisrealtor.org (IAR), the state's single-family and condo sales totaled 8,135 in July 2010, down 29.7 percent from July 2009's 11,566 homes. The median price was also down from $167,185 in July 2009 to $160,000 last month - a decline of 4.3 percent.

""The flipside to the success of the tax credit in reducing inventories is that we have an anticipated break in the action,"" said Mike Onorato, GRI, president of the Illinois Association of Realtors and broker-owner of Onorato Real Estate in Coal City.

Onorato added, ""The underlying issue for stability in the housing market remains a healthy job market. We need some significant boosts in economic development, employment, and consumer confidence to reduce foreclosures and create some equilibrium between supply and demand for housing. Slower sales and rising inventories will force more downward pressure on prices.""

The city of Chicago also felt the decline, with July total home sales down 19.5 percent to 1,589 sales compared to

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1,975 sales a year ago. Median price for a Chicago home last month was $196,500, down 19.8 percent compared to $245,000 a year ago. However, year-to-date sales in the city remain up by 25 percent over last year.

""In the city of Chicago, July's reduction of units sold by 19 percent seems consistent with what Chicago Realtors anticipated for the summer as buyers on the fence moved up their purchases to earlier in the season in order to qualify for the federal tax credits then-offered to move-up or first-time homebuyers,"" said Genie Birch, president of the ""Chicago Association of Realtors"":http://www.chicagorealtor.com and a broker associate with Koenig & Strey Real Living, Chicago. ""While it still remains a great time to buy, buyers are guarded as they consider their own financial stability and job security in the current market, hindering many from making a purchase.""

Despite these reports, year-to-date sales in Illinois remain positive, up 15 percent from January through July 2010, with 65,146 sales compared to 56,650 for the same period in 2009. According to IAR, total home sales, comparing July 2009 to July 2010, were up in 16 of 100 Illinois counties reporting, with 39 of 100 counties posting median price increases.

""The hangover from the expiration of the tax credit in April may extend into fall with forecasts for sales on an annual basis for the next three months indicating a continuation of the July experience,"" said Dr. Geoffrey J.D. Hewings, director of the ""Regional Economics Applications Laboratory (REAL)"":http://www.real.illinois.edu of the University of Illinois. ""The anemic growth of private sector jobs is dampening chances for a more robust recovery. The expectation has to be that the slowing of the national economy will affect Illinois' growth prospects over the remaining months of the year.""

Sales and price information was generated from a survey of Multiple Listing Service sales reported by 37 participating Illinois Realtor local boards and associations.