Illinois Housing Market Ends 2006 On Low Note
The Illinois housing market ended 2006 on a low note, according to Crain’s Chicago Business Journal, and housing experts are forecasting modest gains, if any, for 2007.
Sales of single-family homes and condominiums fell 8.9 percent last year compared to 2005’s pace, according to the Illinois Association of Realtors. Illinois home sales were down 16 percent in the fourth quarter alone.
Across the nation, homes sales fell 10 percent in the fourth quarter.
“We had a year of contraction,” said Pat Callan, treasurer for the Realtors’ association and real estate agent / owner of Realty Executives Premiere in Wheaton. “But I think we’ve seen the worst.”
Illinois was spared the dramatic declines seen in states where homes sold at a blistering pace in 2004 and 2005. Fourth-quarter sales fell between 21.3-36.1 percent in the Arizona housing market, as well as California, Florida and Nevada, according to the Realtors association.
Despite a slower sales pace and high home mortgage loan costs, Illinois home prices have remained fairly stable. The median sale price last year was $203,900, up slightly from $200,900 the year before.
“When you look at the stats, prices didn’t go down,” Callan said. “It was the units.”
With Illinois mortgage rates hovering near historic lows, he’s forecasting a year that will either match, or slightly beat, last year’s pace.
“There are sales in the marketplace and I’ve seen more activity in my office,” he said.
Paul Kasriel, economist for Northern Trust Bank, is less optimistic about the future of Illinois home prices, given the excess supply of new and existing homes.
“Sales are still going to be sluggish,” he said. “It’s going to be another year of recession in housing.”
National housing starts figures issued Friday by the Commerce Department appear to back Kasriel’s sentiment.
Housing starts fell 14.3 percent in January, according to the U.S. Commerce Department’s report - contrary to a recent spike in home builder confidence.
“Builders are abandoning land now and that indicates they are not expecting to start a lot of new homes. Construction is going to continue to weaken,” he said.
SOURCE: Crain’s Chicago Business