Realtors: Sales coming back slowly

Home sales this summer across the western suburbs have been on the rise — a thaw in the market following several frozen months.

It might not be a sure sign of recovery, Realtors say, but it could be a crucial first step toward it.

In close to a dozen towns across the western suburbs, more single-family homes have been sold so far this year than at the same point in 2008. In a few of those communities, sales are either close to or higher than the mark in 2007, when the bottom fell out of the housing market.
But the rise in home sales is not necessarily a light at the end of the tunnel.

The number of single-family homes sold tended to only increase wherever the median sale price had fallen dramatically — typically, down 20 percent from two years ago, according to records from Mainstreet Organization of Realtors.

In Brookfield, for example, sales are slightly as they were in 2008. On average, 99 homes were sold last year through September, according to Mainstreet, and 97 have been sold  through September  this year. In Riverside, however, sales are down from 2008 so far, with 50 homes being sold last year and only 39 sold so far in 2009 through September.

In Riverside, home prices have gone down by 30 percent from 2007.
The average home was listed for $439,450 in 2008, and the average home in 2009 was listed for $374,950.

In Brookfield, prices are down by 18.7 percent, from $258,250 in 2008 to $234,000 in 2009.
Sales, however, are expected to turn around as the year progresses, say real estate experts.
Riverside Realtor Brian Brennan, of Burlington Realty, said home prices are climbing back up, although it is happening slowly.

“There’s activity in all price ranges right now,” Brennan said. “People are interested in mostly single-family homes. They’re not knocking down the doors, but they are calling about the properties.”

Ed Jaeky, a Realtor with Realty Link Ltd. in Brookfield, said people are now looking for a specific type of home in the area.

“People want three-bedroom homes with basements and two-car garages,” Jaeky said. “There are 110 current home listings in Brookfield, ranging from $99,9000 to $800,000.”
Brennan said there were a multitude of reasons for the market decline.

“People have to have employment, because you can’t get a loan without a job. Secondly, the credits — peoples’ credit stores are affecting the loan amounts they can receive,” Brennan said.
Jaeky said that young people especially need to rein in their spending habits to afford a home.

“Unfortunately, a lot of young people get married, buy new cars, have a honeymoon in Hawaii — and then they want to buy a home, and they can’t get preapproved for a loan because they have all these payments,” Jaeky said. “For a lot of young people, student loans just kill them. They’ve got to start saving now.”

As the housing market came to a standstill, the number of empty and available homes kept growing because of foreclosures.

With supply far outpacing demand, the price of homes dropped. But in the past year, more people have been buying homes — in part because prices are low, but also because of incentives for first-time buyers.

It has not been enough of a demand to turn prices around, but it is a step in the right direction, said Mike Drews, the president of Mainstreet who is also a Realtor in Oswego.

“Those first-time buyers that are in the market, they’re buying the foreclosures and the short sales,” he said. “What it’s helping doing is it’s taking the fluff that was out of the market.”

From September 2008 to last month, the inventory of single-family homes in Kane, DuPage, Cook and Will counties was cut in half. If the trend continues, home prices could start to return to normal, which Drews said he believes will be a crucial sign of recovery.

“I think once the inventory gets depleted we’ll be pretty much back to what a normal market looks like,” he said.

Several Realtors in the suburbs attributed the new interest in the market, in part, to first-time home buyers. February’s federal stimulus package included an $8,000 tax credit for any new homebuyer who has not owned a home in the past three years.

Brennan offered some advice for those looking to buy their first home.

“They need to be preapproved and should talk to a lending institution to see what they can realistically afford,” Brennan said. “They should be buying a home to enjoy it, to make memories in it — it’s a 30-year commitment, so they shouldn’t be buying just to buy it.”
But the incentive might not be around for much longer.

Buyers must close the deal on a house before Dec. 1 to claim the benefits.

“In order to rebound the market, I think the stimulus package for first time homebuyers needs to be renewed, because it’s going to expire,” Jaeky said