Market Conditions: Is the Worst Behind the Chicago Housing Market?
The Chicago Tribune sees signs of optimism in the spring selling season.
While the results of February existing-home sales, released Monday, were as dismal as expected, the number of contracts signed during the month was at its highest level since April, when a homebuyer tax credit was propelling the market. Additionally, there are stories of multiple offers, busy open houses and, importantly, sellers being more realistic about their pricing.
“You can tell by the chatter that’s going on, the phone calls I’m getting,” said Elise Rinaldi, an @Properties agent. “I really believe the paralysis is over. There’s buyers again.”
Sales appear to be picking up on the North Shore.
Baird & Warner agent Coralie Norwell had a client whose red brick home in Evanston went under contract the same day it was listed for sale.
“Sometimes you just hit it,” she said. “There are a lot of people out (looking). Unemployment is down, and I imagine that has something to do with it.”
Illinois’ unemployment rate has declined for 13 consecutive months and stood at 8.9 percent in February, the state reported last week.
Last month, three of Rinaldi’s four listings that went under contract along the North Shore had multiple offers, including a $1.65 million house that attracted multiple offers within two days and will sell for close to its listing price.
“Buyers are so savvy right now, and many of them have been looking for a year,” she said. “Sellers are (saying) this is what I have to do to move my properties.”
During February, 6,199 homes were under contract in Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry, and Will counties, according to Midwest Real Estate Data LLC.
Meanwhile, the number of properties listed for sale on the local multiple listing service in February was at its lowest level in at least five years, with 81,343 listings, according to Midwest Real Estate Data. Some of that decline is likely the result of homeowners deciding to rent out their existing homes while they buy another one, rather than sell them for less than they wanted, said Mabel Guzman, president of the Chicago Association of Realtors.
Not everyone is quite as optimistic however.
William Strauss, senior economist at the Federal Reserve Bank of Chicago, characterizes the state of the housing market as a “soft bottom.”
“It’s hard to say that things are improving at this point,” Strauss said of the February sales data.
After seeing an increase in activity and buyer quality in February, March has been slower, and Prudential Rubloff agent Mario Greco does not expect any great spring sales surge or a return to higher prices for sellers.
“I think we’re going to have a continued middling spring market and a disappointing summer market and, depending on interest rates, a tentatively middling fall market,” Greco said. “We’re better than we were in 2009. If we weren’t beating ’09, that’d be a big problem.”
Only the numbers, when we ultimately get them, will tell the story.
Is this the turnaround that everyone has been hoping for?
Are buyers getting off the fence even without a tax incentive?
Area home sales fall, but glimmer of hope seen in pending contracts [Chicago Tribune, Mary Ellen Podmolik, March 22, 2011]
