RISMEDIA, February 6, 2010—Homes sales transactions in the metropolitan Chicago real estate market bounced back strongly during the second half of 2009 as the general economy began showing signs of renewed growth, according to an analysis of Chicago-area housing sales data by the RE/MAX Northern Illinois real estate network.
Overall sales of attached and detached homes in the metro Chicago real estate market increased 1.5% in 2009 when compared to 2008, but in the second six months of the year sales rose briskly, with 41,376 home sales closing compared to 33,635 during the last half of 2008, a 23% increase.
Suburban home sales climbed 4.7% for the full year and 24.7% during the second half. In Chicago, home sales for the full year slipped 5.7%, but in the final six months they rose 19.1%. Transaction data is supplied by Midwest Real Estate Data, LLC, (MRED) and analyzed by RE/MAX Northern Illinois.
“A combination of government intervention, a rising stock market and early signs that economic growth was resuming all helped encourage potential buyers to reenter the housing market during the second half of 2009,” said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network. “We thought the tax incentive offered to first-time home buyers was an especially effective incentive. The fact that it has been extended and expanded until the end of April will help get the housing market off to a good start in 2010.”
The improved level of sales activity was broadly distributed across the city and suburbs. Annual home sales were higher for the year in five of the seven counties that form the core of the metro Chicago real estate market and down fractionally in the other two. Kendall County had the largest gain at 9.9%, followed by Will County at 3.3% and Cook County at 1.7%. Lake and DuPage counties had increases of less than 1%, while McHenry and Kane counties had decreases of less than 1%.
The second half of the year saw much stronger sales in every one of the counties, led by Kendall with a 36% increase over the comparable period in 2008. The gains registered in the six other counties were: Cook 24%, DuPage 23%, Kane 13%, Lake 18%, McHenry 18% and Will 22%.
Of the 240 suburban market areas tracked by RE/MAX, home sales activity rose in 143, but the largest of the suburban communities were not always among the gainers. Aurora, Naperville, Joliet, St. Charles and Evanston reported fewer sales, while Arlington Heights, Crystal Lake, Elgin and Plainfield had increases.
Sales of detached homes were largely responsible for the resurgence in activity seen during the final six months of 2009, according to Merrion.
Detached-home sales rose 11% in the metro Chicago real estate market during 2009, and sales of city homes led the way with an increase of 27%, RE/MAX reported. Among the 77 official city neighborhoods in Chicago, 57 reported increased sales of detached homes. Suburban sales were up 8.4%.
Results from the second half of the year were even more impressive. Metro area sales of detached homes rose 27.5% in the final six months of the year compared to the same period in 2008. Suburban sales were up 25.6%, and city sales rose 37%.
Detached home sales were up in every county in 2009, with Cook reporting a 20% rise, followed by Kendall and DuPage with gains of 9.5% and 6.4%, respectively. Sales in McHenry and Will rose nearly 3%, while Kane increased 2.5% and Lake 2%. Among the individual market areas tracked by RE/MAX, 167 showed higher detached sales.
During the second half of 2009, double-digit increases were the rule when detached sales are examined on a county-by-county basis. Kendall topped the list with a 42% increase and was followed by Cook at 34%, DuPage at 26%, Will at 21%, McHenry and Kane with 20% each and Lake at 18%.
“Sales activity was up pretty much across the board in the detached segment,” said Merrion. “But the rebound was more restrained at the upper end of the market,” he said. “For example, in the city sales in 2009 were off 20% in Lincoln Park and lesser amounts in Bridgeport, Hyde Park, the Near North Side, Near West Side, Lake View, North Center and West Town. But in the last half of 2009 even many of these markets posted gains compared to the prior year.”
Sales of attached homes, including condominium apartments and townhouses, fell 12.3% in the metro Chicago real estate market in 2009, but rallied during the final six months of the year, increasing 16% from the 2008 level, with 15,308 units changing hands.
“Attached homes, especially of condominium apartment units, continue to be the slowest segment of the market, but even that area improved during the second half,” Merrion said. “In Chicago, where a large majority of attached homes are condo apartments, attached sales were down 20% for the full year but rose 9% during the final six months compared to the same period of 2008. Attached home sales in the suburbs were stronger in part because townhouses are a larger percentage of the mix, and our agents report that townhouse sales held up relatively well.”
Attached sales were off 4% in the suburbs for all of 2009 but gained a robust 22% over the final six months. Kendall was the only metro-area county to report an increase in attached home sales for the full year, but all seven counties experienced increased sales activity during the second half of 2009. Kendall led the way with an impressive 67% increase, followed by Will at 27%, DuPage and Lake at 18% each, Cook at 15%, Kane at 14% and McHenry at 10%.
“We expect the positive trends seen over the last half of 2009 to continue through the first half of 2010 in the metro Chicago real estate market,” said Merrion. “Demand for detached homes, especially in the entry level segment, is strong, and the attached home market is improving. Even the upper end of the market appears to be getting stronger. As an example, among the 21 communities that make up what we would call the North Shore market, from Evanston and Skokie on the south to Lake Bluff on the north, 14 recorded an increase in detached home sales in 2009.
“Attached sales, particularly of condominium apartments, are also improving,” Merrion continued. “A lot of buyers are in the market because they know there are good deals to be had and want to take advantage of the tax credit. We expect a stronger first half this year than last, so the real question is: what will happen in the second half of the year as government support for the housing market, such as the tax credit, fades away? If job growth picks up and interest rates remain stable, we should do nicely. If they don’t, fewer home sales are the most likely result.”
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