Chicago-area existing-home sales rise for 3rd straight month

Will the local housing market’s improvement hold?

Year-over-year sales of existing homes and condominiums rose in September for the third consecutive month, sparking optimism that, at least from a volume standpoint, the market is on the mend.

Pricing, however, is not. Distressed sales and lower-priced homes that appeal to first-time buyers caused September’s median sales prices to fall in all nine area counties. In fact, the area’s median sales price of $199,000 was down 10.8 percent from last year and 22.7 percent lower than in September 2007, according to the Illinois Association of Realtors.

Sales of existing homes and condominiums in the Chicago area rose 5.9 percent in September, to 6,862 homes, the real estate trade group reported Friday.

Kendall County highlighted the market’s dichotomy, as sales rose 26.2 percent but the median price plunged to $177,000, down almost 22 percent from September 2008.

Chicago recorded its first monthly, year-over-year sales gain since May 2006, as sales rose 5.8 percent, to 1,918 properties. But the median price fell 16.2 percent, to $225,000.

First-time buyers are driving the marketplace, accounting for 45 percent of transactions over the past year nationally, so the industry continued Friday to trumpet the need for an expansion of the first-time buyer’s tax credit. The $8,000 credit expires Nov. 30.

“We are turning a corner, but I don’t believe we’re stabilized yet,” said Pat Callan of Realty Executives Premiere in Wheaton. “Prices are still going down, and I don’t know that the year-over-year increase in sales is sustainable without the tax credit.”

Beyond the tax credit, the variables that will define the market going forward remain the same: the still-difficult credit environment, unemployment and interest rates.

“It’s clear that we’ve been at a plateau for the better part of 2009, but you really have to ask yourself where the risk is tilted, and I would be concerned that the risk is still tilted to the downside,” said ShoreBank chief economist David Oser.

Mary Ellen Podmolik
Chicago Tribune
October 24, 2009