Housing thaw on the way?
Realtors: Spring could turn the market

By Anna Marie Kukec, Daily Herald Business Writer
Posted March 25, 2008


Realtor Connie Hofherr sold a home in Palatine for $430,000 in just five days in February, and her colleagues at Starck Realtors in Mount Prospect also sold some homes.

"Sales are definitely up, but certainly not where they were two or three years ago," said Hofherr, a 32-year veteran Realtor.

Like Hofherr, suburban Realtors are encouraged by the slight uptick in sales in the last few months and believe this spring could be a turning point for a depressed market.

Total sales of Illinois homes, including single-family and condominiums, were up 15.1 percent in February to 6,832 sales, compared to 5,938 in January, according to an Illinois Association of Realtors report released Monday.

However, sales statewide still were down about 23 percent compared to February 2007, when 8,860 units were sold.

"It's too early to call bottom," said Diane Swonk, chief economist and senior managing partner of Mesirow Financial in Chicago. "Sales in February are more reflective of low mortgage rates in January than a major trend.

"The situation likely deteriorated again in March as lenders pulled in a bit and getting a mortgage got more difficult. The headwinds created by housing are beginning to abate but will be with us still for some time to come."

Nationwide, existing home sales rose 2.9 percent, or 5.03 million units in February, compared to 4.89 million in January. But they remain 23.8 percent below the 6.6 million level of a year ago, according to the National Association of Realtors.

"There typically is an upswing of sales heading into the spring market, which is a normal cycle, but we definitely have been getting more phone calls," said Kay Wirth, president of the Illinois Association of Realtors. She's also a Realtor with ReMax Unlimited Northwest in Crystal Lake.

Wirth said home prices have dropped and then stabilized, making this a good time for buyers to invest for the long haul.

"We're optimistic. We have to be," Wirth said.

In Chicago, condominium sales in February saw 1,047 units sold, down 9.7 percent from the same month last year with 1,160 units.

The condo median price in Chicago was up 10.5 percent to $314,900 from February 2007.

The Chicago area showed 4,310 total home sales in February, down 26.9 percent from 5,894 home sales in the same month of 2007. The Chicago area includes Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties.

The median home sale price for the Chicago area was $240,230 in February, up 0.1 percent, compared to $240,000 in February 2007.

The monthly average interest rate for a 30-year, fixed-rate mortgage for the North Central region was 5.99 percent in February, up 0.26 points from the 5.73 average rate the previous month. The average was 6.25 percent in February 2007, according to the Federal Home Loan Mortgage Corp.

Members of Lombard-based Illinois Association of Mortgage Professionals also saw a slight increase in people seeking mortgages in recent months, Executive Director Marve Stockert said.

"This is a great time to buy," Stockert said. "There are a lot of great deals out there now."

Stockert said the underwriting requirements have changed for mortgages. Some people who could have bought a home last year cannot now or need to put down a higher down payment. But FHA loan requirements haven't changed and still provide for a 3 percent down payment.

"Despite the changes, we are seeing more people wanting mortgages, but certainly not at the level of a year ago," he said.