Illinois Housing Market Forecast for 2010
Unit Home Sales to Improve; Smaller Median Home Price Declines
The Illinois Association of Realtors®, in affiliation with the Regional Economics Applications Laboratory at the University of Illinois, recently released their 2010 Illinois Housing Market Forecast.
This annual report provides a snap-shot projection of housing sales activity and median home prices in Illinois and the Chicago PMSA.
The report begins with an introductory "State of the Economy" which summarizes the employment woes that we have experienced in Illinois not only during the current recession but also in a historical context. Illinois has lost nearly 425,000 jobs since its prior peak employment in November 2000 and the report projects that
given the expectation of a jobless recovery for the next 12-18 months, it is unlikely that Illinois will recover to its prior peak employment much before 2016. This is alarming
in light of the fact that to a great extent employment drives the housing market.
"Sadly, neither major political party in Illinois appears to have
recognized this new economic reality; the state’s worsening fiscal position, the pervasive sense
that corruption is an acceptable way of doing business combined with the erratic and inconsistent
manner in which state revenue enhancements have been proposed have combined to generate a
less than favorable business climate." 1
Unit Home Sales
Despite the difficult economic environment, the report projects that unit home sales in Illinois will experience sporadic annual growth throughout the year with solid growth in June and July.
The picture for Chicago is not as attractive with January and February projected to have modest, positive gains but the rest of the year will see the sales move negative. The improvements in unit homes sales should be somewhat expected after the large declines that we've seen in real estate transaction volume over the past few years. While we are comparing to a decimated base, the forecast of higher unit home sales in Illinois is one indication that we are at or near a bottom in terms of sales activity.
Median Home Prices
The forecast for median home prices in Illinois, while improved, is still declining on an annual basis. The report forecasts that in 2010, median home prices will decline 5.0% and 4.4% for Illinois and the Chicago PMSA respectively.
While disappointing, these declines are far better than the nearly 20% declines that we experienced in some markets in 2009.
"Given the economic picture, one might anticipate another difficult year for the housing
market. However, there is more positive news here than for the economy as a whole." 1
Despite continued forecasted declines in Chicago unit home sales and the projected decline in median home prices in 2010, the tone of the report is one of cautious optimism. Geoff Hewings, economist with the Regional Economics Applications Laboratory at the University Illinois has provided
some commentary on the report that you can view in the video on this web page. If you would like, you may also download a copy of the report by clicking on the link below.
We all know how difficult it has been over the past year in the overall economy and particularly in the real estate sector. Continued job losses, mounting foreclosures and other random factors
could certainly have a negative impact on the 2010 Illinois Housing Market Forecast. However, with current historically low interest rates, increased affordability and the cash rebates provided through our Buyer Rebate Plan, there has never been a better time to buy real estate in Chicagoland.
If you are looking to purchase a home in Chicago, please call us today at 312-282-7349 for a no obligation consultation.