Post-Tax Credit Pause in Illinois Home Sales Activity for July

Year-to-Date Sales Remain Up 15.0 Percent Statewide

SPRINGFIELD, Ill., Aug. 24 /PRNewswire-USNewswire/ -- After nearly a full year of home sales gains statewide, the rush to meet the homebuyer tax credit deadline combined with weak job and economic reports led to a lull in Illinois home sales activity in July. According to the Illinois Association of REALTORS^® latest report, statewide total home sales (which include single-family and condominiums) in July 2010 were down 29.7 percent, totaling 8,135 homes sold compared to July 2009 sales of 11,566 homes. The median price in July 2010 was $160,000, down 4.3 percent from $167,185 in July 2009. The median is a typical market price where half the homes sold for more, half sold for less.

Year-to-date sales remain in positive territory, up 15.0 percent January through July 2010 with 65,146 sales compared to 56,650 home sales for the same period in 2009. The year-to-date median sales price was off -0.9 percent to $155,000 from $156,330 for 2009.

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

In the Chicagoland Primary Metropolitan Statistical Area (PMSA) total home sales (including single-family and condominiums) in July 2010 were down 25.1 percent to 5,561 homes sold compared to 7,427 homes sold in July 2009. The median home sale price for the Chicagoland PMSA was $193,000 in July 2010, down 9.6 percent from $213,500 in July 2009.

Year-to-date sales remain up 22.8 percent January through July 2010 with 43,660 sales compared to 35,554 home sales for the same period in 2009. The year-to-date median sales price is down 5.1 percent to $189,900 from $200,000 for 2009.

"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) 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."

The unemployment rate nationally was unchanged in July at 9.5 percent; the Illinois unemployment rate lowered -0.1 point to 10.3 percent in July from the previous month.

The monthly average commitment rate for a 30-year, fixed-rate mortgage for the North Central region was 4.58 percent in July 2010, down from 4.74 percent during the previous month, according to the Federal Home Loan Mortgage Corporation. Last year in July it averaged 5.52 percent.

In the city of Chicago, July total home sales (single-family and condominiums) were down 19.5 percent to 1,589 sales compared to 1,975 homes sold in July 2009. The city of Chicago median price in July 2010 was $196,500, down 19.8 percent compared to $245,000 a year ago in July 2009.

Year-to-date sales remain up by 25.0 percent January through July 2010 with 12,397 sales compared to 9,915 home sales for the same period in 2009. The year-to-date median sales price for the city of Chicago is down 6.1 percent to $215,000 from $229,000 for 2009.

"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 REALTOR® Genie Birch, president of the Chicago Association of REALTORS® 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."

According to the IAR report, total home sales (single-family and condominiums) comparing July 2010 to July 2009 were up in 16 of 100 Illinois counties reporting with 39 of 100 counties posting median price increases. The following Illinois counties reported gains in the median price for the month: Champaign, up 15.2 percent to $162,450; LaSalle up 7.6 percent to $113,500; Lake, up 13.3 percent to $238,000; Madison, up 14.1 percent to $127,250; McHenry, up 1.4 percent to $182,500; McLean, up 4.3 percent to $169,500; Monroe, up 7.1 percent to $182,000; Sangamon, up 1.6 percent to $127,000, Tazewell, up 15.0 percent to $138,000 and Will, up 1.0 percent to $189,950.

Sales and price information is generated from a survey of Multiple Listing Service sales reported by 37 participating Illinois REALTOR^® local boards and associations. The Chicago PMSA, as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

The Illinois Association of REALTORS^® is a voluntary trade association whose 46,000 members are engaged in all facets of the real estate industry. In addition to serving the professional needs of its members, the Illinois Association of REALTORS^® works to protect the rights of private property owners in the state by recommending and promoting legislation that safeguards and advances the interest of real property ownership.

Find Illinois market stats data at www.illinoisrealtor.org/marketstats.

** Multimedia: Click here to view a video of economist Geoff Hewings discussing the housing market forecast.

SOURCE Illinois Association of REALTORS