Despite a tax incentive and lower interest rates, home sales in Elmhurst this year are down from last year and years past.

According to Tim Schiller of Schiller Real Estate in Elmhurst, sales are down around 20 percent from this time last year.

The average sale price has dropped as well: from $509,686 YTD 2008 to $427,514 at the same time in 2009, more than a 16 percent decrease.

From 2005-08, Schiller had a 25.5 percent decrease in units sold with a 4.1 percent decrease in sales price, mostly from the steep nationwide decline at the end of 2007, when the average Schiller unit sold for $504,148.

“At the end of 2007 we had to start readjusting,” he said.

The number of permits to build homes has decreased in Elmhurst as well.

According to Building Commissioner Bruce Dubiel, the city has issued 25 building permits in 2009, with nine awaiting approval. The city issued 49 permits in 2008 and 84 in 2007.
Still, things could be worse, Dubiel said.

“The whole nation is down, there are some towns with no homes being built,” he said. “We’re fortunate.”

Schiller found a silver lining in this year’s market as well: of the 244 units sold by his group through September, 107 were sold in the third quarter. This means sales are picking up later in the year, most likely because of an $8,000 federal tax credit to first-time home buyers included in the American Recovery and Reinvestment Act.

“The first tax credit (approved in 2008) was a loan, a zero-percent loan but it still had to be paid back,” Schiller said. “Once people stopped confusion on what the tax credit was, sales definitely picked up.”

Community Bank of Elmhurst President and CEO Rich Reichert also saw a citywide increase in home sales.

“The first six months of the year home sales were very slow,” he said. “But since then have picked up quite a bit.”

Although the tax credit seems to be stimulating unit sales in Elmhurst, the properties being bought tend to be at the lower end of the Elmhurst housing market.

Of the 299 total housing units sold by Schiller Real Estate in 2009, nearly 28 percent of the units sold are between $200,000 and 299,000.

However, nearly 26 percent of the units sold are also $500,000 or higher.

“People have found bargains at the very high and low ends,” Reichert said.

Schiller said he is in support of an extension of the tax credit for first-time home buyers, currently set to expire Nov. 30.

Sen. Johnny Isakson, R-Ga., a former president of the largest independent real estate company in his home state, is proposing legislation that would extend the tax credit until June 2010 for all homebuyers, not just first timers, who either make $150,000 individually or $300,000 as a couple.

“I would love to see (the tax credit) extended,” Schiller said. “But knowing our government, they’re going to wait until the last minute.”

Regardless of whether the tax credit is extended, neither Schiller nor Reichert expects a swift housing recovery.

“There will be a period of readjustment for the rest of the year and next year, and the year after that go back to normal,” Schiller said. “We won’t see as much decline as leveling off then.”
Reichert offered a similar prognosis.

“I think the recovery has started already, but it will be a very slow process,” he said. “It may be several years to get back to the values we had a couple years ago.”