Illinois Median Price Up 0.7% in the Third Quarter of 2007

RISMEDIA, Nov. 23, 2007-Despite low interest rates and plenty of inventory many buyers remained on the fence in the third quarter due to a residual effect of reported credit tightening in the mortgage markets. Home prices made slight gains according to the Illinois Association of REALTORS(r) (IAR) third quarter report, with the median home sale price at $209,000, up 0.7% from $207,500 the same quarter last year. The median is a typical market price where half the homes sold for more, half sold for less. The average sale price was $270,632, up 3.1% from $262,559 in the third quarter of 2006.Total home sales (which include single-family homes and condominiums) totaled 39,519, down 16.3% from 47,217 home sales in the same period a year ago.

“Some may look back at this time and see an opportunity missed with interest rates so low and a nice selection of homes on the market,” said REALTOR(r) Kay Wirth, president of the Illinois Association of REALTORS(r). “A significant share of metro areas in the state saw gains in median sales prices during the third quarter of this year. If you consider rates now in the mid-six percent range and financing indeed available for buyers with good credit, plus the economy still humming, this is a good time to get off the fence and enter market.”

The third quarter interest rate for 30-year, fixed-rate mortgages averaged 6.58% in the North Central Region, according to the Federal Home Loan Mortgage Corporation. It was up from 6.40% in the second quarter and down from 6.61% third quarter 2006.

Sales and price information is generated from a survey of Multiple Listing Service sales reported by 35 participating Illinois REALTOR(r) local boards and associations. The Chicago Primary Metropolitan Statistical Area (PMSA), as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

In the Chicago PMSA the median home sale price increased 4.2% to $262,500 in the third quarter of 2007 compared to $252,000 in the same period one year ago.

Total home sales (including single-family and condominiums) in the Chicago PMSA were down 19.6% in the third quarter to 26,258, compared to 32,672 home sales in 2006.

A sample of counties in the Chicago PMSA with increases in the median home sale price in the third quarter include Cook, up 6.2% to $276,000; DeKalb, up 0.5% to $186,000; Kane, up 2.6% to $241,215; Kendall, up 1.1% to $239,870; Lake, up 10.7% to $282,250; McHenry, up 0.2% to $232,500; and Will, up 2.2% to $230,000.

A sample of counties around the state where the median home sale price increased in the third quarter include Kankakee, up 2.7% to $141,750; Macon, up 1.2% to $87,000; Madison, up 0.8% to $125,000; McLean, up 5.0% to $154,900; Peoria, up 5.2% to $122,000; Rock Island, up 2.7% to $96,000; and Winnebago, up 0.5% to $127,000.

“The main issue for the real estate sector stems from consumer perceptions about the direction of home values,” said Dr. Geoffrey Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois in a forecast prepared for the Illinois Association of REALTORS(r). “The performance of the Illinois economy has been very variable this year with several recent months of employment declines. Our forecast indicates it will be late 2008 or even early 2009 before the state recovers it prior employment peak of November 2000.”

REAL’s forecast for October through December 2007 shows slower sales from the same period in 2006 with median prices for Illinois and the Chicago PMSA to remain about the same. Hewings adds that the recent two reductions in interest rates by the Federal Reserve offer some prospects for a modest recovery in the overall economy with jobs a key factor going forward.

For more information, visit http://www.illinoisrealtor.org.