Feb
20

Metro Chicago Real Estate Market Holding Its Own

February 20, 2011

Last month’s Chicago area home sales saw a decline compared to sales during the same month last year, but that’s not necessarily bad news.

In January, 3,843 homes were sold in the seven-county metropolitan Chicago real estate market. That’s a 3.7 percent decline from the 3,980 units sold in January 2010.

sold signSo why is that not reason for concern?

“January sales numbers are usually the lowest of any month of the year, but they can be a harbinger of what is to come as the housing market moves into the busy spring season,” said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network.

“A year ago, the spring market was quite active, helped greatly by the federal tax credit offered to homebuyers. This year there is no tax credit, yet January sales were at a very comparable level to last year’s. That suggests buyers are returning to the market and that home buying activity this spring has more upside potential than many expert observers currently believe.”

According to the data, compiled by Midwest Real Estate Data, LLC and analyzed by RE/MAX:

*Distressed properties represented 48 percent of all Chicago area home sales in January, the most since February of last year when it hit 49 percent.

*Foreclosures accounted for 33 percent of all sales.

*About 15 percent of all sales were short sales.

*Chicago area home sales fell 26 percent from December to January.

“We don’t want to read too much into the fact that January home sales were 26 percent lower than in December,” Merrion said. “A substantial December-to-January decrease has been the pattern in recent years. Even when the market was just about at its peak, January sales in 2006 were 31 percent lower than December sales in 2005, and the smallest December-to-January sales decline since then was 20 percent in 2006-2007.”

There was very mixed news regarding home prices. For detached homes, the median price increased to $175,000 in January 2011 from $172,500 the year prior.

But for attached homes, the median price dropped 26 percent, from $180,000 a year ago to $133,400 last month.

“We’ve noticed in the last couple of years that the percentage of home sales represented by distressed properties tends to peak during the first quarter of the year,” said Merrion. “As we move into the spring and summer seasons, sales of non-distressed properties pick up, and that tends to have a positive impact on prices.”

January sales in Chicago’s seven-county region were quite mixed:

*Cook: Down 8.1 percent; City of Chicago: Down 15.4 percent

*DuPage: Up 21.8 percent

*McHenry: Down 9.7 percent

*Kane: Up 6.7 percent

*Kendall: Down 23.5 percent

*Lake: Up 4.3 percent

*Will: Down 6.3 percent

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