October Housing Numbers: First Time Home Buyer Tax Credit Drives Market

November 23, 2009

Residential

It?s That Time of the Month Again: October?s Housing Numbers

chicago-block-mansion-sqThe Illinois Association of Realtors® released its sales numbers for October 2009. Winners include the increasing quantity of units sold over the same period last year, but sellers continue to be the losers as the median price of a home has significantly declined in the year over year analysis.

Home Buyer Tax Credit Has Helped With Sales

As seen in previous months, home buyers have pushed the market by taking advantage of historically low interest rates, 2004 pricing and the first time home buyer tax credit. Yet home prices continue to be soft because of distressed properties and competition with other properties in this higher inventory market. The following figures demonstrate the effects of these two factors. According to IAR, 2,012 single family homes and condominiums in Chicago sold at a median sales price of $215,000 last month. In comparison, 1,566 units sold at a median price of $262,500 in October 2008. While the number of homes sold grew by 28.5% over this period, the median price nevertheless decreased by 18%.

Second Time Home Buyer Tax Credit Expected to Move Inventory

Current home owners, who wish to purchase a new residences, and the market as a whole will benefit from the extension and expansion of the tax credit to second-time home buyers. As the number of units sold each month continues to increase, inventory is starting to be absorbed and pricing appears to be stabilizing. The variables for this market equation, however, rests upon unemployment figures and bank-owned real estate. Other variables that have affected pricing include new Federal Housing Authority guidelines and regulations. A FHA spot check and other FHA modifications should work in the favor of first time home buyers. In the Chicago real estate market, The $417,000 limit on conforming loans will continue to negatively affect property sales in the $500,000 to $1,000,000 range. Limited and more costly financing options will hinder buyers in this price range. In many parts of the country the conforming loan limit is $729,000.

We would like to thank MACSURAK for sharing today?s photo via the Creative Commons License.
Email This Post To a Friend. Email This Post To a Friend.

About Andrea Geller

Andrea Geller, Realtor® with Sudler Sotheby?s International Realty, specializes in residential real estate sales and marketing of resale properties and new construction homes. Acknowledged as an expert in the real estate industry, Andrea has been interviewed for industry related articles for print and online media including the Chicago Tribune, Crain’s Chicago Business, Reuters, Bankrate.com, and Illinois Realtor Magazine. Andrea’s commitment extends to the community as an active member of several professional associations. Her appointments include the Board of Directors of the Chicago, Illinois, and National Association of Realtors® and the Lakeview Chamber of Commerce. She markets herself under HOT PROPERTY®, an innovation in the real estate industry led by Chaz Walters that has been marketed since the 1990s. This unique real estate concept is always a step ahead of the industry providing marketing from cutting edge interactive exposure to targeted innovative advertising opportunities. Visit her at www.hotpropertychicago.com or 773.868.3090.

View all posts by Andrea Geller

4 Responses to “October Housing Numbers: First Time Home Buyer Tax Credit Drives Market”

Trackbacks/Pingbacks

  1. October Housing Numbers: First Time Home Buyer Tax Credit Drives … - November 23, 2009

    […]  Email This Post […]

  2. New Housing Construction Predicted to Rise, Yet Housing Market is Tenuous at Best | The Chicago 77 - January 20, 2010

    […] is expected to rebound this year from its severely depressed 2009 level. The market, however, remains unpredictable as foreclosures continue to rise. In other news, Frank Nothaft, chief economist at Freddie Mac, […]

  3. Up Up and Away are the Interest Rates | The Chicago 77 - February 19, 2010

    […] personal concern is that with the home buyer?s tax credits of $8,000 first time buyers and $6,500 for repeat buyers expiring on April 30th, what will motivate […]