CHICAGO— The number of statewide home sales dipped again lastmonth, but median prices also rose again, according to data fromthe Illinois Association of REALTORS®. Tightcredit standards and lower inventory levels have made decliningsales, at least on a year-over-year basis, and rising prices thenorm for this year. August marks the 24th consecutive month ofannual price gains.

|

Statewide home sales in August 2014 totaled 14,679 homes sold,down 10.4% from 16,384 in August 2013. In the nine-countymetropolitan area, home sales last month totaled 10,370, down 13.3%from last year. And the city of Chicago saw a 15.3% year-over-yeardecrease in home sales in August with 2,414 sales, down from 2,850in August 2013.

|

But a deeper look into the numbers shows that the decline ininventory was only a partial explanation for the slowdown. Adecline in foreclosure sales has also contributed to the decline inoverall sales, according to Geoffrey J.D. Hewings,director of the Regional Economics ApplicationsLaboratory of the University of Illinois.In fact, he tells GlobeSt.com, “regular sales are almost at lastyear's level. Last month, the decline in the number of foreclosuresales was particularly sharp.”

|

“The interesting irony is that while sales are decreasing,prices keep rising,” Hewings adds. The statewide median price inAugust was $175,000, up 6.1% from August 2013 when the median pricewas $165,000. In the Chicago metropolitan area the median price inAugust was $215,000, up 9.1% from August 2013. And in the city, themedian price rose to $270,000, an annual increase of 10.2% sincelast year.

|

“August rounded out the typically hot summer market with a trendwe've seen all year,” says Matt Farrell, presidentof the Chicago Association of REALTORS® andmanaging partner of Urban Real Estate. “Chicagobuyers have fewer homes to choose from yet are finding theirdesired house in a shorter amount of time. Median home prices areflourishing as a result of these focused buyers presenting theirbest offer despite the low inventory.”

|

“A re-estimate of the foreclosure inventory suggests it will beanother 12 to 15 months before this inventory returns topre-recession levels,” Hewings says. He's not certain that gettingthose numbers back to normal will result in an increase in sales,however, “it certainly means these properties will act as a dragany longer.”

|

He considers it more important that job creation continue at ahealthy pace. If it does over the next year, prospective buyers andsellers will have “a little more sense that the recovery will besustained, and have enough optimism to enter the market.”

|

Still, in the near future, he says “modest increases in medianprices are anticipated to continue.”

|

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.