Sales of existing homes in the Chicago area dropped again in September, falling more than 20 percent in the Chicago area from a year ago and more than 25 percent within the city of Chicago, the Illinois Association of Realtors said Monday.
It was the third consecutive month that home sales failed to beat their year-ago comparisons. The industry is bracing for more bad news through the end of the year; a homebuyer tax credit in late 2009 that fueled sales will mean difficult comparisons.
“It’s clear the housing market benefited from the tax credit through the first half of the year and now we are feeling the withdrawal symptoms in the form of slower sales,” said Sheryl Grider Whitehurst, president of the trade group. “Bottom line, home sales will struggle until jobs return to the economy, consumer confidence improves and foreclosures work their way through the system.”
In the U.S., sales of previously occupied homes grew 10 percent in September to a seasonally adjusted annual rate of 4.53 million. They were still down 19 percent from the same month a year earlier. August’s results were revised downward slightly.
Single-family and condominium sales in the Chicago area totaled 5,327 homes sold in September, a 22.4 percent drop from September 2009. Double-digit declines were recorded in home prices, too, with the median home price falling 12.1 percent from September 2009, to $175,000.
Within the city of Chicago, home sales totaled 1,403 homes sold, a 26.9 percent drop from September 2009. The city’s median price in September of $180,000 was down 20 percent from last year.
Sales for the first nine months of the year were 10.5 percent above the same period in 2009 for the Chicago area and up 11.1 percent for Chicago.
Sales of Chicago condos tumbled 28.6 percent during the month, compared with a year-over-year sales decrease of 24.3 percent for single-family homes within the city. The median price of $240,000 for a condo was down 11.5 percent from September 2009, while the median price for a single-family home fell 10 percent, to $135,000.
Home sales in Chicago were actually down 26.9%. That’s a 10 year low and 44% of those sales were distressed properties – short sales, foreclosures. It’s abysmal out there right now. Prices will come down.
If you are interested you can see 5 years of sales data graphed for the broader Chicago metro area on the 2nd graph on this page: http://blog.lucidrealty.com/chicago_real_estate_statistics/ There are also other local real estate stats plotted there.
Obama and the so called “leaders” of this country had better do something soon. This is really depressing and the banks are sitting on tons of money, but afraid to loan it to anyone. The housing market is dead and the stench from the rot is reaching other parts of the economy.
So when will houseing prices bottom out? I would like to buy within the next several years, but hesitant that prices will keep coming down.
Funny how the president of the Illinois Realtor group says it’ll take jobs, consumer confidence and fewer foreclosures to stabilize the housing market and leaves out…
PRICES.
The dirty little secret realtors don’t want to talk about: The prices are still bubble prices. Not only do they still need to come down to reach typical levels, they’ll probably overshoot on the downside.
Lower prices means lower commissions, however, so realtors don’t like the sound of that.
Never has one industry done so much to continually mislead the consumers it serves. “Buy now or be priced out forever.” “There’s never been a better time to buy.” Etc, etc, etc, ad nauseum.
The day I hear a realtor admit there was a housing bubble that realtors helped cause and that prices are still out of line with incomes will be the day I begin to trust them a little.
I won’t hold my breath waiting.
Realtors had nothing to do with the home pricing mess. The lenders and “appraisors” that were left to run wild and free for years did. Many of those “appraisors” lost their licenses.
Imagine a former client calling you to list their home that you sold to them for $200,000 2 years prior who had lost their job and have to relocate while the housing market is tanking at the same time. You discover that they took out an “equity” loan for $50,000 (nice Escalade in the driveway too).
Realtors didn’t grant them that “equity”. Their pastor/mother/son/Avon lady or neice slinging mortgages on the side did.
Additionally, considering a broker split on commissions, the difference in sales price of say $150,000 vs. $200,000 was basically irrelevant to most realtors.
@Appraised is right, I think. The economics of realtors is that “churn” is really the most important thing to their income. That sometimes has its own problems but did not cause the bubble.
Bubbles do just happen sometimes in human affairs. It’s natural to seek someone to blame, but that doesn’t mean there really is some Snidely Whiplash in the backstage.
Brian B makes a good point and high lights something much bigger. He says there is no “Snidely Whiplash”, no villain in the bubble scenario. I’d say that’s arguable but the point is that the problem is systemic that the system will produce these near-catastrophic results on occasion.
Unless one fixes or changes the underlying system, which very few people in America seem to want to do, then regulation is what’s required, which no politician in American wants to do because they’re corrupted by business. All of them.
If anything, the realtor would want those homes listed at the lowest price for a quick sale (commission payment) but that would be breaching our fidiciary duty to our client and wouldn’t get us any repeat business in any particular neighborhood either.
I’ve been checking Redfin pretty much every week for the past year and in my ‘hood nothing is moving. The same overpriced inventory sits week after week, month after month. From my perspective the asking prices are ridiculous. $750k for a 2br condo with $800 assoc fees, $300 parking on $7k in real estate taxes? Yeah I’m all over that one, just let me get my checkbook.
Previous blogger is right, prices need to come down. The average cost of house should be no more than 2.5 times one’s annual wage. I don’t think the average wage in Chicago is that much, but pretend it’s $60,000. Then that would mean average home should be no more than $150.000. Average home is selling for way more than that.
Realtors are at least partially responsible for the crash. I sold my house at the heights and a real estate wienie made a mess of the buyers finances. Way over appraised by “her” apprasors who could not even find the town the house was in. Closing she arranged a reputable firm to be dropped in favor of hers. Which did not have the correct interest rate on the closing docs. They signed based on her word the she would fix it later.
Not only did the higher interest stick but now their property taxes are about 40% more than they should be. They are sooo stuck. Tried to tell them but they trusted her.
Real Estate needs major reform, too many liers. And to pay upwards of 5% is nuts. Sell your property yourself.
If realtors truly honored their “fiduciary duty” to clients, then they’d be telling the vast majority of potential buyers to WAIT, as in– “Are you crazy? What are you some kind of knife catcher?! As your realtor I have a fiduciary responsibility to warn you that home prices are still trending downward nationwide, with foreclosures projected into the next five years. Since most people move in 7 years, most people who buy this year will lose money when they go to sell after the realtors, lawyers, banks, inspectors, etc, take their cut on top of the depreciated asset called your house. In fact, chances are mortgage rates are going up as well as property taxes, so future buyers will have even LESS money to devote to a monthly payment. No, I can’t let you do it in ignorance. My fiduciary responsibility requires that I inform you that if you buy this house now, you’ll end up writing a check when you go to sell it unless you hang on to it for a few decades.”
Yeah. That would be a realtor exhibiting fiduciary responsibility to buyer clients. As opposed to uh, the Illinois Realtor group proclaiming today’s news as “High Affordability Conditions!” as their press release did.
Shill, shill, shill. Spin, spin, spin. Wouldn’t know a fiduciary responsibility if it bit them in the hind quarters.
Oh, and thanks for all the fiduciary responsibility y’all exhibited in the past ten years warning your clients not to buy houses that were well over 3x their income with NINJA loans. Glad you got your commissions. No ethical worries there. None at all.