We suspect the spike in gasoline prices that occurred last year may have increased home buyers interest in being close to commuter train service, which could have helped home values in the Metra communities
Chicago, IL (PRWEB) October 7, 2009
During 2009, Chicago suburbs served by Metra commuter trains saw the average price of a home decline less sharply than other areas of the seven-county suburban Chicago real estate market, according to a study of home sales activity by RE/MAX.
The average sales price of a home in the Chicago's suburbs during the first six months of 2009 was 19 percent less than during the same period in 2008. Thirty-two towns served by Metra were looked at in the study, and they experienced an average price decline of 15.2 percent for the same period. Median prices in the Metra served towns declined 15.4 percent, versus 17.4 percent for all suburbs.
However, the Metra towns, on average, saw 19.2 percent fewer homes changing hands during the first half of this year than a year earlier. That compared to 15.6 percent fewer home sales in the suburbs as a whole. The transactions considered in the study were for both attached and detached homes.
A year earlier a similar comparison yielded different results. RE/MAX looked a price trends in the same towns, comparing data from the first six months of 2008 to the first half of 2006. On that basis, the Metra communities experienced a smaller decline in transaction activity (about 3.2 percent less from 2006 to 2008) than did the suburban area as a whole. Prices in the Metra served communities fell 2.7 percent over the two year period, while suburban home prices generally were up 1 percent.
"We suspect the spike in gasoline prices that occurred last year may have increased home buyers interest in being close to commuter train service, which could have helped home values in the Metra communities," said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network. "A more difficult question is why the number of units sold declined more in transit-served communities than in the suburbs generally, while the average price declined less.
"We believe the explanation may be that those who live close to Metra service appreciate the convenience offered by their location and were less motivated to sell. That not only would reduce transaction volume but, with fewer properties for sale, home values would be more resistant to downward pressures. It will be interesting to see if these divergent trends hold in the face of lower fuel prices this year," he said.
The latest RE/MAX analysis looked at home sales in three towns along each of the 11 Metra corridors throughout the Chicago suburbs. Sales results for the first half of 2008 and 2009 were compared.
The Metra lines posting the strongest results were the North Line (with Evanston, Winnetka, Lake Bluff as the sample communities), the BNSF (Riverside, Western Springs and Lisle) and the Heritage Corridor (Summit, Lemont and Lockport). All saw the number of homes sold fall more than the suburbs as a whole on a percentage basis. They also recorded average price declines of less than 7 percent, median price declines of less than 9 percent and an increase in average market time of less than 10 percent, easily surpassing the suburbs as a whole.
The RE/MAX analysis also looked at the selected Metra towns based on their distance from downtown Chicago, grouping them into three categories - towns close to the city, those close to the end of a Metra line and towns in the middle.
The most distant communities showed the best results in the 2008 vs. 2009 comparison in all categories except sales volume, which fell 20.7 percent. Average home prices were down only 10.7 percent (compared to 19 percent for all suburbs), median prices fell 8.9 percent (versus 17.4 percent for all suburbs) and average market time increased 12 percent (versus 13 percent for all suburbs).
Those numbers contrast with results from the closest suburbs, which trailed the general suburban market on all measures except change in average market time. Those communities averaged an 18.2 percent decline in home sales, a 22 percent fall in average sales price and a 23 percent drop in the median sales price. Average market time rose 8.4 percent.
The middle-distant Metra towns slightly outperformed the general suburban market in both average sales price (down 14.5 percent) and median sales price (down 16.5 percent) but showed a modestly greater decline in units sold (down 18 percent) and a slightly larger increase in average market time (up 14.5 percent).
Average market time needed to sell a home in the Metra towns rose from 88 days in 2006 to 165 days in 2008 and 185 days in 2009. For all suburbs, the average market time rose from 84 days in 2006 to 162 days in 2008 and 183 days this year.