Thursday, March 01, 2007
chicago housing market
A January chill for Chicago home sellers
By Mary Umberger
Tribune staff reporter
Published February 28, 2007
Though local observers say the slumbering Chicago housing market has started to stir, it snored right through January, when sales slid by nearly 11 percent from a year before, according to data released Tuesday by the Illinois Association of Realtors.
It was the 10th consecutive month that sales declined in Chicago, though prices squeaked upward by 2.2 percent, the association said.
Nationally, the market fared better, at least in terms of sales. On a month-to-month basis the January numbers gave some encouragement, with existing-home sales climbing 3 percent to their highest level in seven months, according to a separate report from the National Association of Realtors.
However, the more closely watched year-over-year data still showed a national sales decline of 4.3 percent, and the median price for an existing home fell for the sixth straight month, by 3.1 percent.
The national group cautioned that brutal February weather might be a blow to the gradual market recovery the trade group still predicts.
"Some unusually warm weather helped boost sales in January," said the NAR's chief economist, David Lereah. "On the flip side, the winter storms that disrupted so much of the country in February could negatively impact the housing market.
"We shouldn't be surprised to see a near-term sales dip, but that will be followed by a continuing recovery in home sales."
Some Chicago agents and long-suffering home sellers say they see signs of a recovery.
"So far, we've had more showings [in the last several weeks] than we had all of last year," said William Dahms, a North Side mortgage banker who has been trying to sell his condo in the Ravenswood Manor neighborhood since July and has dropped the price to $225,000 from $235,000.
Dahms says he is firm on the current price, but acknowledges that buyers continue to be picky because they have many properties to choose from.
"They're a tough crowd," agrees Glen Ellyn agent Gaylyn Genovesi, who says buyers are turning up their noses at homes that are not pristine.
She recently got a firm contract on a house that had been for sale for about a year, during which time it cascaded through several price cuts to settle at $449,000 from $517,000. After that, the owners got three offers almost simultaneously.
The national report said inventory, considered glutted in some areas, was easing. But new listings taken in anticipation of the so-called spring selling season put the January inventory right back where it had been in December, at a 6.6-months' supply. The supply peaked at 7.4 months in October, the group said.
"Generally, the market has begun to stabilize," said Tim Rogers, chief economist for Briefing.com. "I don't think it will take much more thinning [of the inventory] before we'll see prices starting to improve."
Sales after the spring activity gets fully under way will determine whether housing is on its way to righting itself, which could happen within one or two quarters, he said.
But economist Mike Larson said the inventory problem has a long way to go before it is resolved.
"Inventory has come down [since last year], and a lot was made of that," said Larson, who tracks housing for Weiss Research in Jupiter, Fla. "But frankly, if you look at historical data, that happens just about every year.
"Inventories are climbing again because of what I call `the march of the relisters,'" Larson said. Sellers who failed to move their homes in spring and summer pulled them from the market around Thanksgiving and now are relisting them, he said.
"I expect the inventory numbers to continue rising in February, March and April, and we may very well set a new high," he said.
One bright spot in the national report was in the Northeast, where January sales rose 5.9 percent year over year. The Midwest held its ground, with sales increasing by less than 1 percent from January 2006, though the median price slid by 3.5 percent.
Sales were off by 7.3 percent in the South and by 4.6 percent in the West, the NAR said.
In the Chicago area the biggest decline was in Grundy County, where home sales fell more than 15 percent. In DeKalb County, however, sales jumped 33 percent, though median prices slipped by 11 percent, according to the Illinois Realtors.
Chicago-area condo sales were down 3.4 percent, though prices rose by 3 percent. Cook County condos led the region in price increases, climbing 6.4 percent year over year, the group said.