March home sales drop, but prices rise in Chicago

Daily Herald News Services
Posted April 23, 2008

Total Illinois home sales in March fell 29.5 percent from last year at this time, according to the latest figures by the Illinois Association of Realtors.

In Chicago, there were 2,045 total home sales in March, off 11.5 percent from last year at the same time.

Nationally, U.S. home prices rose about 0.6 percent from January to February while prices fell 2.4 percent during the 12-month period ended in February, a federal housing regulator said on Tuesday.

The Office of Federal Housing Enterprise Oversight said its index of home prices is down 3.1 percent since a peak in April 2007.

Locally, the Illinois median price in March was $194,500, off 1.3 percent from last year. The median is a typical market price in which half the homes sold for more, half sold for less.

"During March, home sales remained mired in slow growth activity due to low consumer confidence, tighter financing factors and a weakening economy," said Kay Wirth, president of the Illinois Association of Realtors.

The median home sale price for the Chicago market was $248,000 last month, up 1.2 percent from March last year.

"The Kankakee area, including Kankakee and Livingston counties, fared particularly better than other counties in March with sales and prices holding steady," said Wirth, a broker with Re/Max Unlimited Northwest in Crystal Lake.

Wirth said there is a lot of pent-up demand for housing in the market at this time.

The median price in the city of Chicago increased 5.3 percent to $300,000, compared to last year at this time.

"City of Chicago sales in March continue to show an increase in the median price of homes by over 5 percent, year over year, showing great promise for Chicago's homeowners and those interested in getting into the marketplace," said David Hanna, president-elect of the Chicago Association of Realtors.

The monthly average commitment rate for a 30-year, fixed-rate mortgage for the Midwest was 6.01 percent in March, up a slight .02 points from the 5.99 average rate in February, according to the Federal Home Loan Mortgage Corp. Last March it averaged 6.19 percent.

"While Illinois median prices are likely to continue to increase over the next three months, the levels forecast will still be about 1 (percent) to 2 percent below those observed in the same months in 2007," said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois.

National Association of Realtors chief economist Lawrence Yun sounded an optimistic note.

"Existing home sales could start to show a sustained increase within a few months, unless there are some additional economic or inflationary pressure," Yun said.