IAR Market Stats

November 20, 2007 - CORRECTED January 24, 2008

FOR IMMEDIATE RELEASE

Contact: Mary Schaefer, Ann Londrigan, 217/529-2600

Illinois Median Price Up 0.7 Percent in the Third Quarter of 2007; Pent-up Demand to Boost Market in 2008

SPRINGFIELD, Ill. – Despite low interest rates and plenty of inventory many buyers remained on the fence in the third quarter due to a residual effect of reported credit tightening in the mortgage markets. Home prices made slight gains according to the Illinois Association of REALTORS (IAR) third quarter report, with the median home sale price at $208,500, up 0.5 percent from $207,500 the same quarter last year. The median is a typical market price where half the homes sold for more, half sold for less.

The average sale price was $268,742, up 2.4 percent from $262,559 in the third quarter of 2006. Total home sales (which include single-family homes and condominiums) totaled 39,608, down 16.1 percent from 47,217 home sales in the same period a year ago.

“Some may look back at this time and see an opportunity missed with interest rates so low and a nice selection of homes on the market,” said REALTOR Kay Wirth, president of the Illinois Association of REALTORS. “A significant share of metro areas in the state saw gains in median sales prices during the third quarter of this year. If you consider rates now in the mid-six percent range and financing indeed available for buyers with good credit, plus the economy still humming, this is a good time to get off the fence and enter the market.”

The third quarter interest rate for 30-year, fixed-rate mortgages averaged 6.58 percent in the North Central Region, according to the Federal Home Loan Mortgage Corporation. It was up from 6.40 percent in the second quarter and down from 6.61 percent third quarter 2006.

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 Primary Metropolitan Statistical Area (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 the median home sale price increased 4.2 percent to $262,500 in the third quarter of 2007 compared to $252,000 in the same period one year ago. Total home sales (including single-family and condominiums) in the Chicago PMSA were down 19.6 percent in the third quarter to 26,258, compared to 32,672 home sales in 2006.

A sample of counties in the Chicago PMSA with increases in the median home sale price in the third quarter include Cook, up 6.2 percent to $276,000; DeKalb, up 0.5 percent to $186,000; Kane, up 2.6 percent to $241,215; Kendall, up 1.1 percent to $239,870; Lake, up 10.7 percent to $282,250; McHenry, up 0.2 percent to $232,500; and Will, up 2.2 percent to $230,000.

A sample of counties around the state where the median home sale price increased in the third quarter include Kankakee, up 2.7 percent to $141,750; Macon, up 1.2 percent to $87,000; Madison, up 0.8 percent to $125,000; McLean, up 5.0 percent to $154,900; Peoria, up 5.2 percent to $122,000; Rock Island, up 2.7 percent to $96,000; and Winnebago, up 0.5 percent to $127,000.

“Several areas of the state saw more modest declines in sales and continued median price increases,” said Wirth, a broker with Re/Max Unlimited Northwest in Crystal Lake. “Peoria County, for example, has experienced a surge in commercial growth and with residential sales down just 3.4 percent for the quarter. Peoria also reported price appreciation at 5.2 percent, yet homes in the area remain very affordable. Sales were up 2.3 percent in Champaign County in the third quarter with reports of lenders becoming more creative and sellers offering some incentives.”

“The main issue for the real estate sector stems from consumer perceptions about the direction of home values,” said Dr. Geoffrey Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois in a forecast prepared for the Illinois Association of REALTORS. “The performance of the Illinois economy has been very variable this year with several recent months of employment declines. Our forecast indicates it will be late 2008 or even early 2009 before the state recovers it prior employment peak of November 2000.”

REAL’s forecast for October through December 2007 shows slower sales from the same period in 2006 with median prices for Illinois and the Chicago PMSA to remain about the same. Hewings adds that the recent two reductions in interest rates by the Federal Reserve offer some prospects for a modest recovery in the overall economy with jobs a key factor going forward.

In the latest forecast from the National Association of REALTORS, chief economist Lawrence Yun said the housing market will improve from a steady unleashing of pent-up demand, and from a wide abundance of safer mortgage products: “The level of pent-up demand reaching the market next year is a bit uncertain, and it is possible for even higher home sales activity than we’re forecasting if buyers regain their confidence about the long-term benefits of homeownership. Over the near term, home sales are likely to be fairly flat as the lingering impact of the credit crunch filters through the system through the end of the year.”

Third quarter condo sales across the state were down 18.3 percent to 12,179 condos sold compared to 14,903 in 2006. The median price for a condominium in Illinois in the third quarter of 2007 was $229,000, up 5.5 percent from $217,000 a year ago.

In the Chicago PMSA, condo sales were down 17.2 percent to 11,746 units sold during the third quarter of 2007, compared to 14,193 in the same period of 2006. The third quarter condo median price in the Chicago PMSA was $233,000, up 4.9 percent from $222,100 in the third quarter of 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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