Home Sales on Track for Solid Autumn

CHICAGO—The state's housing market ended the summer with moderate gains in both home sales and median prices, according to the latest data from the Illinois Association of REALTORS®. And experts say the data show that in both the fall and coming year the market will sustain this steady rate of growth.

“We're not processing as many distressed properties,” Jim Kinney, president of the state association of realtors and vice president for luxury sales for Baird & Warner in Chicago, tells GlobeSt.com. And the number of mid-priced and luxury homes sold has increased, boosting prices. “Sales have held steady since June and we will probably see that continue.”

Statewide home sales, including single-family homes and condominiums, in August 2015 totaled 15,088 homes sold, up 0.9% from August 2014 when 14,957 homes sold. And the statewide median price in August 2015 rose to $180,900, a 3.4% gain over August 2014's median of $175,000.

The city of Chicago and its suburbs have seen a greater increase in sales than the state as a whole. In Chicago's metro area, home sales in August 2015 totaled 10,854, an increase of 2.8% from the 10,554 sales in August 2014. And the metro area's median price in August was $220,900, up 2.7% from $215,000 in August 2014. In the city itself, 2,629 homes were sold in August 2015, up 6.3% from last year when 2,474 homes were sold. The median price of a Chicago home was $270,000, up 0.2% over August 2014.

“The rising median prices seen in this summer's market has coaxed many sellers to overcome lingering reluctance and list properties,” Kinney adds. “That stated, there is still an abundance of demand even at elevated prices as potential buyers choose from a diminished pool of homes at a rapid rate.”

“Sales returned to a more modest long-term annual growth rate in August while prices continued to increase,” says Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois. “From our data, the percentage of distressed sales among the total sales for the Chicago PMSA was 13.5% in August. However, the good news is that it was the lowest August reading since 2009 and much lower than the peak of 23.7% in 2010.”

Kinney believes the market will retain its steady pace. “I'm not seeing the Fed move before the first of the year,” he says, referring to a possible rate increase. And unlike some observers, he does not believe the Fed is eager to raise rates for some time to come. “I don't believe they will want to upset the apple cart in an election year.”