4Q07 Illinois Median Price Moves in a Modest Range;
Buyer’s Market Continues in Early 2008

SPRINGFIELD, Ill. – Illinois median prices closed 2007 in a moderate range, while slower sales activity may be boosted in the months ahead by the federal economic stimulus package that includes important housing provisions recently passed by Congress awaiting President Bush’s signature. According to the Illinois Association of REALTORS (IAR) fourth quarter 2007 report, the Chicago Primary Metropolitan Statistical Area (PMSA) median home sale price was $248,000, up 1.2 percent from $245,000 in 4Q06. Statewide, the median sale price in the fourth quarter was $191,000, down 4.5 percent from $199,900 in 4Q06. The median is a typical market price where half the homes sold for more, half sold for less.

Illinois home sales (which include single-family homes and condominiums) totaled 27,176 in the fourth quarter, down 22.9 percent from 35,254 home sales in the same period a year ago. For the year, total sales were down 16.8 percent with 139,803 homes sold compared to 168,038 sales in 2006. The statewide median home sales price was $201,250 in 2007, down 1.1 percent from $203,500 in 2006.

“Housing provisions included in the economic stimulus package passed by Congress include temporarily increasing loan limits for FHA, Fannie Mae and Freddie Mac and will help to bolster housing market activity by infusing much needed funding into these mortgage options and thus making the dream of homeownership more attainable for homebuyers,” said REALTOR Kay Wirth, president of the Illinois Association of REALTORS. “Homebuyers sitting on the fence now should be looking at the large inventory of homes available and getting their finances in order to make a move while interest rates remain at record lows. Overall, the Illinois economy is performing very well compared to the rest of the Midwest in terms of job activity.”

The 4Q07 interest rate for 30-year, fixed-rate mortgages averaged 6.27 percent in the North Central Region, according to the Federal Home Loan Mortgage Corporation. It was down from 6.58 percent in the third quarter and also down from 6.29 percent a year ago in 4Q06.

Sales and price information is generated from a survey of Multiple Listing Service sales reported by 35 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.

In the Chicago PMSA total home sales (single-family and condominiums) were down 28 percent in the fourth quarter to 17,364, compared to 24,120 home sales in 4Q06. For the year, total home sales in the Chicago PMSA reached 92,656, down 20.5 percent from 116,527 sales reported in 2006. The Chicago PMSA median home sale price for 2007 was $254,000, up 2.4 percent from $248,000 in 2006.

“The uncertainty in the national housing market has penetrated into the Illinois economy although the volatility is more muted than for other parts of the country, especially the major metropolitan areas and states like Florida,” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “In terms of prices, the Springfield MSA looks to be stellar during the first quarter of 2008 with other metropolitan areas of the state experiencing the effects of uncertainty at the national level.”

Adds Hewings: “Most metropolitan statistical areas in the state can expect to see the usual rebound in sales in March.”

A sample of counties in the Chicago PMSA with increases in the median home sale price in the fourth quarter compared to the same period a year ago include Cook, up 4.0 percent to $260,000; Kane, up 0.4 percent to $229,990; and Lake, up 1.8 percent to $252,000.

A sample of counties around the state where the median home sale price increased in the fourth quarter include Sangamon, up 16.2 percent to $115,000; Peoria, up 6.9 percent to $112,250; Champaign, up 1.9 percent to $147,627; Jo Daviess, up 5.4 percent to $160,450; McLean, up 1.5 percent to $149,150; Rock Island, up 5.0 percent to $95,000; and Tazewell, up 9.9 percent to $128,000.

“Some areas weathered the fourth quarter well despite the climate of mortgage tightening, lower consumer confidence due to economic concerns and the expected seasonal slowdown,” said Wirth, a broker with Re/Max Unlimited Northwest in Crystal Lake.

“Other downstate areas that saw sales increases in the fourth quarter include Sangamon County (Springfield), Macon County, (Decatur), Iroquois and Kankakee counties and Jackson County (Carbondale),” said Wirth.

In the latest forecast from the National Association of REALTORS, chief economist Lawrence Yun said sales activity is expected to remain soft through the first half of the year despite a generational low in mortgage interest rates. “Household formation was only half of what it should have been last year given the demographics of a growing population and sustained job growth, so there clearly is a pent-up demand from buyers who are on the sidelines,” said Yun.

4Q07 Condominiums

Fourth quarter condo sales across the state were down 28.6 percent to 7,962 condos sold compared to 11,157 in 2006; 43,476 sales were reported for the year, down 17.6 percent from 2006. The median price for a condominium in Illinois in the fourth quarter of 2007 was $225,000, up 5.9 percent from $212,500 a year ago. The median price for a condominium in Illinois for the entire year of 2007 was $223,000, up 4.1 percent from $214,200 a year ago.

In the Chicago PMSA, condo sales were down 28.4 percent to 7,614 units sold during the fourth quarter of 2007, compared to 10,632 in the same period of 2006. The fourth quarter condo median price in the Chicago PMSA was $230,000, up 6.0 percent from $217,000 in the fourth quarter of 2006. For the year, Chicago PMSA condo sales were down 17.4 percent to 41,703 units sold during 2007, compared to 50,488 sales 2006. The year-end Chicagoland condo median price was $228,000, up 4.2 percent from $218,893 in 2006.

The Illinois Association of REALTORS is a voluntary trade association whose 60,000 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.

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Find 4Q07 and 2007 year-end charts at www.illinoisrealtor.org, Market Stats.