Chicago Real Estate Sales Of Detached Homes Turn In Best Showing In 2008

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In a notable reversal from the pattern seen during the prior year, 2008 sales of detached homes in the metropolitan Chicago real estate market were stronger than sales of attached homes despite an overall slowdown in housing activity.

As we move into the 2009 spring home market, buyers continue to enjoy an outstanding environment, with an extensive inventory of homes and mortgage financing at historically low rates. There is a lot of uncertainty in the economy right now, but one thing buyers can count on is that there are some tremendous home values available

In a notable reversal from the pattern seen during the prior year, 2008 sales of detached homes in the metropolitan Chicago real estate market were stronger than sales of attached homes despite an overall slowdown in housing activity. Last year, sales of detached homes, the industry term for traditional single-family residences, fell 20.6 percent, while sales of attached units (primarily condo apartments and townhouses) dropped 32.4%.

That is a sharp change from 2007 when attached sales were off 18 percent compared to a 23.8 percent decline in detached homes. Detached homes accounted for 58 percent of all homes sold in the metro Chicago real estate market during 2008 compared to 54 percent in 2007.

Sales of all homes in metropolitan Chicago declined 26 percent in 2008 when compared to the 2007 total. Transaction data is supplied by Midwest Real Estate Data, LLC, (MRED) and analyzed by RE/MAX Northern Illinois. The Chicago-area data includes Cook, DuPage, Kane, Kendall, Lake, McHenry and Will counties.

The sharper decline in condo and townhouse sales can be traced to a number of factors, according to Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network.

"One problem has been the increasing hesitance of some lenders to provide mortgages on condominium properties," Merrion said. "Another major influence in the decline of attached home sales has been the fact that so many of them traditionally are purchased by first-time buyers, and throughout 2008 many of these buyers were taking a wait-and-see attitude.

"We believe that as the economic situation begins to stabilize, the sales of attached homes will benefit substantially from greater confidence among lenders and first-time buyers and from the $8,000 tax credit for home buyers recently approved by Congress and the President," Merrion said.

The slowdown in transaction volume was fairly uniform across the seven-county Chicago real estate market, with DuPage and Kendall counties showing the smallest decline (25 percent) and Kane County the largest (28 percent). In each of the four other counties (Cook, Lake, McHenry and Will) sales fell 26 percent. Home sales in the City of Chicago were also off 25 percent.

A dozen suburban towns and seven city neighborhoods actually saw transaction volume increase, though in most instances the increases were slight. No suburban town showed an increase of more than eight units over the 2007 total. In Chicago, six of the seven neighborhoods with increases registered gains of 10 units or more, with West Englewood the leader in terms of percentage increase thanks to a gain of 30 percent (49 units).

Detached Homes
Detached sales for the metro Chicago real estate market totaled 39,495 in 2008 compared to 49,711 in 2007. The City of Chicago turned in the best performance in this category, with transaction volume falling 14 percent. That relatively strong showing helped keep the decline in Cook County as a whole to 18.3 percent. Kendall was the strongest of the counties, with a detached sales decline of 15.5 percent. Results in the other counties were as follows: DuPage down 19.2 percent, Kane down 25.4 percent, Lake down 23 percent, McHenry down 24.7 percent and Will down 23.7 percent.

Twenty-four suburban towns and 15 city neighborhoods recorded gains in the number of detached homes changing hands in 2008. Among the suburban communities, only two had double-digit gains, Volo (13 units) and Wood Dale (14 units).

Other gainers were Beecher, Chicago Ridge, Crestwood, Elwood, Ford Heights, Harwood Heights, Hebron, Hometown, Kaneville, LaGrange Highlands, Lincolnwood, Merrionette Park, Millbrook, Millington, Niles, Orland Hills, Peotone, Prospect Heights, Robbins, Solon Mills, Union and Western Springs.

The most active detached-home markets in the suburbs were Naperville (1,156 units), Aurora (1,118 units), Plainfield (876 units) and Joliet (812 units).

The three city neighborhoods with double-digit gains were Chicago Lawn (14 units), West Englewood (48 units) and West Garfield Park (10 units). Other city neighborhoods with increases were Armour Square, Douglas, Fuller Park, Humboldt Park, Near West Side, North Lawndale, Riverdale, Rogers Park, South Chicago, South Deering, Washington Park and Woodlawn.

The city neighborhood with the most transactions in detached homes were Roseland (310 units), Ashburn (242 units), West Pullman (226 units) and Garfield Ridge (217 units).

Attached Homes
Sales of attached homes in the seven-county Chicago real estate market totaled 28,443 in 2008 versus 42,055 units sold in 2007. Again, the City of Chicago experienced the smallest year-to-year decrease, but still saw attached sales fall 29.4 percent. The city also accounted for slightly more than half (14,590 units) of all attached home sales in the metro area.

Among the seven counties, McHenry faired best with a decline of 31.4 percent, followed by DuPage and Will counties at 33 percent. Results in the other counties were: Cook down 36.6 percent, Kane down 35.7, Kendall down 44.7 percent and Lake down 34.5 percent.

Last year, 16 suburban towns and nine city neighborhoods saw transaction totals for attached homes increase from 2007 levels. In the suburbs, Inverness (10 units), Hampshire/Pingree Grove (10 units) and Wilmette (14 units) recorded double-digit increases, with Inverness more than doubling the total of attached homes sold the prior year.

Other suburbs with increases in attached home sales were: Braidwood, Bellwood, Bloomingdale, Burnham, Evergreen Park, Homer Glen, Lemont, Manhattan/Wilton Center, Matteson, Merrionette Park, Peotone, Sauk Village and South Holland. In unit volume, the leading suburbs for sales of attached homes were Aurora (560 units), Naperville (511 units), Palatine (429 units) and Evanston (421).

Among city neighborhoods, the Near South Side finished the year with 60 more attached sales and Oakland gained 11. Other gainers were: Englewood, Forest Glen, Fuller Park, Hegewisch, Roseland, West Garfield Park and West Pullman. The city's two busiest neighborhoods for the sale of attached homes were the Near North Side (2,316 units) and Lake View (1,785 units).

"As we move into the 2009 spring home market, buyers continue to enjoy an outstanding environment, with an extensive inventory of homes and mortgage financing at historically low rates. There is a lot of uncertainty in the economy right now, but one thing buyers can count on is that there are some tremendous home values available," said Merrion. "We expect to see a lot of people taking advantage of that fact."

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