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, real estate agents 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 increase only wherever the median sale price had fallen dramatically — typically, down 20 percent from two years ago, according to records from Mainstreet Organization of Realtors.

But homes are going for much cheaper. Two years ago, the median sale price in Cicero was $213,000. Now it is $80,000 — a 62 percent decrease.

It is a sign that more first-time buyers are getting into the market, said Mike Drews, president of Mainstreet, which is based in Downers Grove.

The activity this summer has been a noticeable change from last winter, when home sales were scarce. “That’s when the phone stopped ringing. That’s when the showings declined,” said Mike Long, a real estate agent in Westmont. “You could have lowered your prices to nothing and it wouldn’t have mattered. No one was looking.”

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 Drews, who also is a real estate agent 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.

Christian Kleiner of RE/MAX Unlimited Northwest said inventory in Bartlett is down 19 percent right now. “This is good that inventory is shrinking because you need to have inventory down to get pricing in line and stabilized,” he said.

Along with inventory, pricing in Bartlett is also down 20 percent, while the number of homes under contract is up 25 percent.

Kleiner said he has noticed more townhouses selling across the northwest suburbs, which he attributes to first-time buyers and those looking to downsize. Some homeowners are now selling their homes for the same price they bought them for three or four years ago.

“It’s a great opportunity for buyers,”  Kleiner said.

Alice Ras Dombrow of Century 21 Olsick and Co., a Lemont-based real estate brokerage firm, said five years ago, homes would spend only a few weeks on the market before they were snapped up. But now, “in Lemont you can expect six to nine months before a house is sold,” she said.

While home sales have been slow in the village, Dombrow has seen some increased activity because of the $8,000 tax credit. February’s federal stimulus package included a tax credit for any new home buyer who has not owned a home in the past three years.

“Usually that means first-time home buyers are looking for a house in the lower range, and lower in Lemont is around $300,000,” she said. Dombrow said the tax credit is spurring those who otherwise might not have considered buying a home into action.

“I had a couple who has been together about 20 years who were renting a home and decided to cash in on the $8,000 and buy one,” she said. “So it has made a difference for people sitting on the fence.” Dombrow said the new lending procedures and rules, while good measures, are dragging the market.

“The lending industry certainly needed some tightening up,” Dombrow said. “Five years ago, banks were giving loans to anybody and everybody with no down payment. Now with all these restrictions in lending, these new processes are in place, which make it harder for loans to go through. It’s a good thing because we needed them, but that’s why it’s harder for people to get loans.”

Foreclosures and short sales also are affecting property values, Dombrow said. “Foreclosures are still on the rise, which lends itself to the decrease in value on homes,” she said. “Buyers are afraid of paying too much for a property now if they think there is a chance of it depreciating in the near future.”