July Year-on-Year Sales Increase Is First in Three Years

August 24, 2009

Residential

Chicago-area home sales are slightly up in July compared to July ’08, the first year-over-year increase in over 3 years, as reported by the Illinois Association of Realtors. The graph below more accurately shows the details.

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Price Disconnect Between Buyers & Sellers

Uniquely Chicago sunrise...hopefully a sunrise in the home market is also taking place.

Uniquely Chicago sunrise...hopefully a sunrise in the home market is also taking place.

The stats are indicative of how the market is responding. August has been an incredibly busy month for myself and my team. We have increased showings by 50% on most of our listings, ranging over all price points: from the low $200,000s up to the $1 million+ homes. It’s a great sign and we are more confident in the market now than we have been in several months. That said, there is still a disconnect on price between buyers and sellers. The market is still in a less favorable state for sellers, but with realistic and educated sellers, deals can be made and homes can be sold.

Below is a monthly year-over-year comparison of home sales (single-family and condo) in the nine-county Chicago area.  “It’s significant that we are seeing break-even or better sales levels compared to last year at this time on top of the month-to-month increases since January,? Pat Callan, president of the association and owner of Realty Executives Premiere in Wheaton, said in the release by Illinois Association of Realtors®.

Chicago Not as Strong as Greater Chicagoland

Chicago-area sales also increased by 4% in June 2009 compared with June 2008, the sixth consecutive month that an increase has been reported. This said, sales volume still fell year-over-year in the city, with 1,975 sales in July, down 11.3% from July 2008. In Chicago proper, the median price was $245,000 in July 2009, down 18.3% from July 2008.

“Chicago continues to show a leveling of the marketplace as we see distressed properties being absorbed. With that said, we are a long way from seeing a stable real estate market in Chicago, and we face challenges surrounding lending that do not take into account real local market conditions,” said David Hanna, president of the Chicago Association of Realtors® in the release. “Policy changes are still needed before Chicago can have a healthy real estate market, and a full economic recovery.” HVCC is one policy that most real estate agents would like to see changed. This government mandated reform is intended to protect buyers from changes in price by an 1/8 of a percent on their loan three days prior to closing. The lender must disclose the final figures three business days prior to closing to the buyer. If the final figures change by 1/8 point up or down at closing, then all parties must walk away from the closing table & wait three additional business days for the lender to recalculate the costs and disclose to the buyer before they can return to the closing table. This is a recipe for disaster, especially with the nature of closings and transitions for people who are moving from another home or a rental and are obligated to be out by a certain date. If the closing is pushed back on their purchase, presumably they will be homeless for a few days incurring additional temporary housing costs in the interim of closing.

The Realtors® group’s sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

The Market is Picking Up in Chicago

The market is picking up with increased showings, but it’s still a long row to hoe from contract to close; the financing piece is always the last piece of the puzzle and that’s proven to be the most unpredictable piece at present. Finding a good, knowledgeable lender and providing as much documentation up front to the lender with your application is key. It’s a must to know your true ability to obtain financing in this market.

We would like to thank John Picken for kindly sharing today’s photo via the Creative Commons License.
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About Robert John Anderson

Robert’s knowledge and expertise from 15+ years of experience have made his business tremendously successful. He eats, sleeps, and lives real estate, which has catapulted him into Chicago’s 1% of Top Producers for the last 8 years with $320+ million in sales, earning Baird & Warner’s prestigious Founder’s Club distinction. His voracious appetite for the Chicago market, its neighborhoods and trends keeps his knowledge current and growing. He focuses on high-quality marketing and service along with working to think outside of the box for all his clients needs. Robert specializes in sellers, buyers, luxury homes, developments and relocation; he also has experience in land acquisition, commercial, and retail sales. You can reach Robert at 312-980-1580 and robert@robertjohnanderson.com or visit him on Facebook, Zillow and LinkedIn.

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