Despite the year-over-year decline, we think that home prices are stabilizing
Chicago, IL (Vocus) March 18, 2010
Home sales in the seven-county metropolitan Chicago real estate market continued to rebound in February with the number of attached and detached homes sold 30.5 percent higher than in February of 2009. Homes also were selling more quickly, with those that did find buyers spending an average of 160 days on the market compared to 186 days for homes sold a year earlier.
However, both the average price and median price of homes sold last month fell from their 2009 levels. The median price for all attached and detached homes sold in the metro area in February was $170,000, compared to $181,268 a year earlier, a 10 percent decline. The average price for the month was $228,821, down 5.4 percent from $241,553 in February 2009.
The data analyzed by RE/MAX was collected by Midwest Real Estate Data, LLC (MRED), the Chicagoland-area multiple listing service.
“Despite the year-over-year decline, we think that home prices are stabilizing,” said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network. “A major factor in driving down aggregate home prices is the large number of distressed properties being sold, especially foreclosures, with many of them priced at the lower end of the market.”
Sales of attached homes, which were in the doldrums through much of 2009, turned in the strongest February performance, rising 39 percent from 1,027 a year ago to 1,426 this year. Sales of detached homes rose 30 percent in the metro area to 2,669 units, up from 2,045 in the same month last year.
“The worst of the sales slowdown in the condo market seems to be passing,” said Merrion. “Loans are more readily available as lenders get a better handle on the risks they are facing in that segment. We anticipate that the first half of this year will end up looking vastly better, in terms of units sold and market time required, than the same period of 2009. But with so many distressed properties on the market, we don’t expect home prices to increase generally. However, in areas where distressed homes are less of a factor, prices could see a small increase.”
The rebound in sales of attached homes (primarily condo apartments and townhouses) was most substantial in Cook County, where 1,426 sales closed in February, up from 1,027 a year earlier, a 38 percent increase. In Chicago, attached sales were up 46 percent as the condo market showed renewed signs of life.
Kane, Kendall and Lake Counties all recorded larger percentage gains in sales of attached units. Sales rose 76 percent in Kane, 75 percent in Kendall and 54 percent in Lake, but the three counties combined accounted for just 153 attached sales. Will County tallied a 25 percent increase in attached sales and there was a 20 percent gain in DuPage County, but sales fell 6 percent in McHenry County.
Sales of detached homes showed particular strength in DuPage and Lake during February, rising 42 percent and 41 percent, respectively, compared to February of last year. Other areas recording strong gains in detached-home sales were Cook County, up 35 percent (with Chicago up 36 percent), Kane County up 38 percent and McHenry County up 23 percent. Detached sales fell slightly in both Kendall and Will counties.
“The greatest strength in the February sales results could be seen in Lake County, where prices for detached homes actually trended higher,” Merrion said. “The median sales price there was $245,000, which is 29 percent higher than it was a year earlier, and the average sales price jumped 21.5 percent to $329,155. It suggests that we are beginning to see more sales activity among higher priced homes.”
Merrion also noted that attached homes sold in Kendall County during February had an average market time of 84 days.
“It’s the first time in more than a year that we’ve seen an average market time of less than 100 days in any of the metropolitan counties,” said Merrion. “One robin doesn’t make a spring, but it is a good sign.”
The RE/MAX Northern Illinois real estate network reported that its own February sales, which include results from counties both within and outside the Chicago metropolitan area, also showed growth. Unit sales were up 21 percent and closed sales volume rose 14 percent compared to the same month last year.
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