Local home sales down 30% in August

By Staff, Sep. 24, 2008

(Crain's) — Home sales in the Chicago area fell slightly more than 30% in August, according to the Illinois Assn. of Realtors.

In the nine-county Chicago region, single-family and condominium sales totaled 6,804 in August, a drop of 30.1% compared with 9,733 sales in August 2007, the Realtors’ group said in a release Wednesday.

In the city of Chicago, home sales fell 30.8% in August, to 2,022 from 2,923 in August 2007.

The median home sale price in the Chicago area was $251,250 in August, down 5.7% from $266,500 in the same period last year, the Realtors’ group said. The median price in the city of Chicago was $295,750 in August, down 3% compared with $305,000 in August 2007.

The median is the price where half the homes sold for more and half sold for less.

Statewide sales fell 27.2% in August, to 10,601, compared with 14,562 in August 2007, the Realtors’ group said. August 2008 sales were down 4.6 percent over last month.

"Prospects for a rapid recovery of the housing market were significantly dampened by the turmoil in the financial markets," Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory of the University of Illinois, said in the release. "While the interventions by the federal government in the financial sector will help stem a more precipitous slide in the housing market, the longer-term recovery of this market will now be increasingly dependent on the economy's recovery."

The median sale price statewide in August was $195,000, a decrease of 7.1% compared with the same month last year.

The Realtors group's sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

Meanwhile, a record decline in U.S. home prices in August attracted more buyers in some areas and led to a sizable decline in the number of unsold homes on the market, the National Assn. of Realtors said Wednesday.

The median price fell 9.5 percent to $203,100, the largest price decline on records dating to 1999. As prices fall, buyers are taking advantage of steep discounts, especially in hard-hit markets like California, Nevada and Florida.

"Time and price are the real cures for the housing market slump," said Mike Larson, an analyst at Weiss Research.

The inventory of unsold homes fell 7 percent to 4.3 million, down from the all-time record of 4.6 million in July. That's a 10.4-month supply at the current sales pace.

The decline, however, merits only "a small round of applause" because around 5 months of inventory is a more typical level, wrote Global Insight economist Patrick Newport. Also, many homeowners who don't have to sell are likely keeping their properties off the market. At the same time, thousands of foreclosed properties are tied up in court and are not for sale yet.

Existing-home sales fell in August to a seasonally adjusted rate of 4.91 million units, down 2.2% from an upwardly revised pace of 5.02 million in July. Sales were down almost 11% from August last year.

The Associated Press contributed to this report.