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HOME SALES DOWN AGAIN IN CHICAGO, But Lower Interest Rates an Encouraging Sign!

More snow here in Chicago tonight, slowing everyone's holiday travel plans here.  Be safe in your travels over Christmas!

The dark cloud continues over home and condo sales, both here in Chicago, across Illinois, and nationally. 

Figures released earlier today by the Illinois Association of Realtors for the City of Chicago indicate the sale of single family and condos sold dropped 41.3% in November as compared to 2007 numbers, while the median home and condo price fell 23.3% during the same period.  The current Chicago Median Price is $222,500, down from $290,000 one year ago.

Across Illinois, units sold 33.9% versus one year ago, and the median price fell 13.2%. 

The IL and local figures come on the heals of a discouraging report by the National Association of Realtors indicating a units-sold drop nationally of 8.6% in November alone, versus October, 2008.  The national median home price dropped 13.2% year over year between November, 2007 and this November, to $181,300.  That's the largest annual decrease in 40 years.

NAR figures indicate 4.2 Million unsold homes were on the market last month, representing a theoretical 11.2 month inventory for sale.  This was up from the 10.3 month estimated national inventory in October.

But here is encouraging news!  

Mortgage interest rates are down, on average, from 6.25% for a 30-Year Fixed Rate Loan in November, 2007, to a 6.13% average today.   Last week, the Federal Reserve Board lowered its benchmark Fed Funds Rate to a target between 0 and 0.25%, immediately, yet temporarily, dropping average interest rates to a near-record 5.19% level for the week ending December 18th, according to data provided by U.S. Mortgage Investor and Guarantor Freddie Mac, the Federal Home Loan Mortgage Corporation.

Initially, falling interest rates sparked a surge to refinance by existing homeowners.  Continued lower rates could spur new purchases next year, many experts say, especially if mortgage rates fall near the 4.5% range targeted by the Fed. 

Many also agree, however, that unsold inventory would have to be reduced, and the increase in home foreclosures abated, for a true housing rebound to begin.

Would you agree?  What additional steps need be taken to turn the housing market, both locally and nationally, around to the positive side?

Please share your thoughts!

For more, read our post today via BlogChicagoHomes.com, with links to Alan Zibel's story in today's Chicago Tribune, as well as summary statistical information from the Illinois Association of Realtors, from their Press Release today.

Happy Holidays!

DEAN & DEAN'S TEAM CHICAGO

Comment balloon 6 commentsDean Moss • December 23 2008 11:14PM

Comments

Hi Dean,

We're hearing so much about all the cold weather across the country, stay warm.

Looks like you really had a huge drop in sales for Nov. As for the rates, yes I think it will be helpful, yet just one of the building bricks for the road to recovery. It will be interesting to see how many will move forward as a result of these rates.

BTW, I'm closing tomorrow myself on a property with a 4.875 fixed, since I began with 6% I'm thrilled. Do I think it could go lower, yes but in the long run I'm happy with the property I purchased and that's more important to me that holding out for a little lower price and potentially lower rate. I'm curious to read your other comments.

Stay warm!

Posted by Lynda Eisenmann, Broker-Owner,CRS,CDPE,GRI,SRES, Brea,CA, Orange Co (Preferred Home Brokers) almost 10 years ago

Dean, January will be a key indicator of how our year will go...

Posted by Paul S. Henderson, REALTOR®,CRS,, Tacoma Washington Agent/Broker & Market Authority! (RE/MAX Professionals.) almost 10 years ago

I agree I think January will begin to tell the story. Interest rates are definitely helping. I have a client who locked in on Monday @ 4.625% for 30 year on a $660,000 house. Closing January 15th! He is one happy camper!

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) over 9 years ago

Remember that October November was the height of panic on Wall Street.  It gave many nervous buyers even more reason to puase.

The psychology is changing for the better.  You agents are going to be some busy people very shortly.

 

Posted by Anonymous over 9 years ago

In our area we have record amounts of snow and January is generally dead. February should give us an idea of where we are heading in 2009. Scott and I wish you and your loved ones a wonderful holiday season with all of the joy and love that it brings.

Posted by Patty Carroll over 9 years ago

Dean, First of all Happy Holidays!  Secondly,  I think the decrease in interest rates will really put a better spin on all of this.   Also let's hope for better weather soon- maybe then people will get themselves to go look again. 

Posted by Judy Greenberg, Coldwell Banker - Buffalo Grove - Long Grove Homes (Coldwell Banker Long Grove) over 9 years ago

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