Chicago Home Sales Continue to Decline
Although many hope for quick end to U.S. housing woes, statistics indicate we might have more of a road to travel before things in the housing market brighten up. According to the Chicago Tribune, the Chicago metro area continues to suffer through substantial sales declines and decreases in median home prices. The declines come on the heels of a continued slide in real estate sales nationwide.
Within the city of Chicago, home sales declined 21.6 percent since October of last year (combined single family home and condo sales). The median price for a home or condo in Chicago was $260,000 — down 9.1 percent from a year ago.
October sales in the Chicago metro area fell 17.7 percent compared to 2007. The median price in the metro area dropped 10 percent within the past year. The median home or condo sales price in the nine county metro market was $225,000.
Across Illinois, units sold fell 16.9 percent within the past year, while the median price statewide fell to $173,000 during the same period. Nationally, sales of existing homes and condos fell 1.6 percent in October compared to the same time last year, according to the National Association of Realtors (NAR). The October national median home price fell 11.3 percent from $206,700 to $183,300 when compared to 2007. The decrease was the greatest percentage drop since record keeping began in 1968, according to NAR.
Economic constraints
While the promise of cheaper homes has lured some buyers out of the woods, other buyers have delayed their purchase expecting lower prices in the near term. The decrease in sales has resulted in large housing inventories — projected at a 10-month supply nationally — in many Chicago neighborhoods and suburbs. In order for inventories to shrink, many experts believe prices must fall even further.
Despite recent bailout money from the Federal Reserve, lenders have continued to tighten their loan underwriting standards. A third quarter survey of senior loan officers by the U.S Federal Reserve indicates about 70 percent of these loan originators applied higher standards on prime loans issued in September 2008, down slightly from the 75 percent who responded about tighter lending rules.
A weak job market hasn't helped housing either. Unemployment across Illinois was 7.3 percent in October, higher than the 6.5 percent national average. The U.S. Economy shed 240,000 jobs in October — the tenth consecutive month that employment has declined.
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