2010 Illinois Housing Market Forecast
The 2010 Illinois Housing Market Forecast released by the Illinois Association of Realtors® (IAR) is generally optimistic, predicting increases in year-over-year condo and single-family home sales and median prices declining at a slower rate than in 2009.
Economists from the University of Illinois Regional Economics Applications Laboratory (REAL) prepared the IAR study, which credits the First-Time Homebuyers’ Tax Credit extension for some of the improved sales projections.
“The momentum gained by the homebuyer tax credit stimulus and plans for more streamlined at-risk loan modifications as well as recent positive reports related to jobs and the economy should carry forward into the 2010 housing market,” said IAR President Michael Onorato.
Statewide, the IAR study predicts that total home sales (single family and condominiums) in most of 2010 will be positive compared to 2009. However, the study notes that sales had declined dramatically in 2009 so there is a lot of ground to make up.
Home and condo sales predictions made in the 2010 Illinois Housing Market Forecast for the Chicagoland Primary Metropolitan Statistical Area (PMSA), which includes Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties, are slightly less positive.
“Overall, compared to the sort of forecasts we were producing this time last year the outlook is much better for 2010 and we will begin to see the starts of some sustained pick-ups month after month in the positive range,” said economist Geoff Hewings, director of REAL. “The downward trends that we’ve been watching over the last year and a half are beginning to bottom out.”
Joblessness and foreclosure rates factor into the housing market recovery. Illinois employment has declined annually since November 2000. The consensus among economists is that employment levels will increase over the next 12 to 18 months, but not fully recover until 2016.
“The most critical factor for housing in 2010 is what happens to employment,” said Hewings, predicting that until consumer confidence in the economy is restored, housing transactions will primarily come from households relocating due to jobs and retirements.
Median prices for condos and single-family homes are expected to continue to decline moderately, compared to 2009 in Illinois and the Chicago region. For the Chicagoland PMSA, the 2010 median is expected to be $184,900, a 4.4 percent decrease from 2009.
“Until those foreclosed properties work their way through the system we won’t have a price recovery that will match the sales recovery,” says Hewings. “Most people are seeing the foreclosure peak occurring in 2010. Particularly in Chicago we are seeing the influence of many more foreclosed properties on the market but compared to a lot of other metropolitan areas it’s still nowhere as bad as it might have been if we look at markets in Miami and California for example.”
Illinois Housing Market Forecast data is generated from a survey of Multiple Listing Service sales reported by 37 participating Illinois Realtor® boards and associations.
