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 Cicero, for example, single-family homes this year saw a significant rebound in sales — twice the number at this point in 2008 and slightly more than had been sold until now in 2007.

But homes are going for much cheaper. Two years ago, the median sale price 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 Realtor 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 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.

Sue Kalina, a Kane County Realtor working with Karen Douglas Realty, has properties across the Tri-Cities. Kalina said she has seen the market slightly improve, but sees it dipping back down during the winter as usual. Kalina said that while it has been hard, the western suburbs don’t suffer as much as other places due to proximity to business hubs like Chicago and Oak Brook.

“We’re not as hard-hit as some other areas,” Kalina said. “It’s certainly a different market. It takes a long time to sell (some of) these.”

Kalina said she doesn’t see the market returning to a sense of normalcy for a couple of years.

“You see spurts of growth and activity, but there’s virtually no new construction going on,” Kalina said. “We still have a lot of clients who want to buy ... but you have to be really on top of your game to get these transactions together.”

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 home buyer who has not owned a home in the past three years.

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 the U.S. Senate, leaders from both parties have proposed extending the tax credit and expanding it so that those with higher incomes can qualify. No action has been taken, though.

“With the tax credit expiring Nov. 30, the big question is what’s going to happen after that if it isn’t extended by then?” Drews said.

Staff writer Hal Conick contributed to this report.