Home prices in Illinois are showing signs of stabilizing according to the June home sales report released today by the Illinois Association of REALTORS®. The homebuyer tax credit has proven to be a boost to the housing market with 10 straight months of year-over-year gains in home sales activity statewide, and a full year of mostly double-digit gains in the nine-county Chicago region.
Going forward University of Illinois economist Dr. Geoffrey J.D. Hewings expects sales to continue posting year-over-year gains through September. This gain in sales activity may be due to a residual effect of the sales of homes purchased using the homebuyer tax credit which ended April 30 and the extension of the closing deadline to September 30 of this year.
Jobs remain the key factor affecting consumer confidence, the overall economy and the housing market.
Said Dr. Hewings in his July forecast: “The economy is certainly not helping the housing market; the loss of over 200,000 temporary census jobs overwhelmed the private sector gains of 83,000 jobs.” As reported by Federal Reserve Chairman Ben Bernanke yesterday in his testimony to Congress, slower economic growth is on the horizon along with a prolonged sluggish recovery in the labor market.
Both the national and Illinois unemployment rates lowered a bit in June (from 9.7% in May to 9.5% nationwide and from 10.8% in May to 10.4% in Illinois). However, according to the forecast: “There is some concern that the surge in employment nationally may be slowing, dampening prospects for growth in Illinois.”
Dr. Hewings noted rental leasing rates have increased about 1% from a year ago: “Over time, if rental rates continue to increase, this may generate some renewed expectation that renters will explore becoming homeowners.”
Here’s a snapshot from IAR’s June Illinois home sales report:
- 10th month in a row for home sales increases; sales up 18.3%
- June 2010 median price up 2.5% to $170,000 compared to June 2009 (the fourth month for median price increases statewide since January 2010)
- 12th month in a row for sales increases; sales up 27.2%
- June 2010 median price down -1.2% to $207,500 compared to June 2009
- Grundy, Kendall and Lake all reported median price increases
*The Chicago PMSA region includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.