IAR released July housing data today that showed positive signs for the Illinois housing market with month-to-month home sales up for the sixth consecutive month statewide and in the Chicagoland PMSA (the nine-county region including Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will). July also marked the first time since March 2006 for the Chicagoland PMSA that we reached positive sales year-over-year, with sales up 0.3 percent from July 2008. Statewide, home sales were nearly break-even, off 0.1 percent from a year ago.
In his August forecast, economist Geoff Hewings, director of the University of Illinois Regional Economics Applications Laboratory, provides analysis related to the July data and a forecast through October. Foreclosures and job losses continue to weigh heavily on the housing market. Illinois’ official unemployment rate edged up to 10.4 percent in July and is higher than the national rate of 9.4 percent.
“There appears to be increasing evidence that the housing market is segmenting – by price and location – generating significant heterogeneity in performance. Thus, the housing market is not only varying in performance across metropolitan areas but there is almost more variation within each of the metropolitan areas. It appears that there are more problems at the high and low ends of the market but there is evidence that distressed sales – through foreclosure and short sales – decreased in May and June to the 31-33 percent range of total sales from a high close to 50 percent during the first part of the year.”
“Once again, while sales have exhibited a rebound, there has been no rebound in prices – a phenomenon observed nationally and not just confined to Illinois and Chicago. The concern here centers on the relationship between prices and foreclosures; there is increasing evidence that the most important factor in foreclosures is the degree to which the homeowner has negative equity in the home.”