The media may be focused on falling home sales, but some hot spots do sparkle in the current Chicago residential real estate market, according to an analysis by RE/MAX Northern Illinois of homes sales activity in the seven-county area.
Through the first nine months of 2007, 21 of the 77 official neighborhoods in Chicago saw more sales or just as many sales as they did during the same period in 2006. In the suburbs, 30 out of 307 communities surveyed had sales equal to or greater than the same period last year.
In comparison, a year earlier 22 city neighborhoods and 68 suburban communities matched or exceeded 2005 sales for the nine-month period.
"As those numbers suggest, home sales in the city have held up somewhat better than in the suburbs,” said Jim Merrion, regional director of RE/MAX Northern Illinois.
In Chicago, the largest gain was recorded in the Loop, where 795 homes changed hands, up from 554 a year earlier, an increase of 241 transactions, or 41.7 percent. Lincoln Park saw sales increase by 130 transactions, a gain of 10.6 percent over the prior year.
Other neighborhoods with notable gains were Lincoln Square, which had an increase of 102 transactions (23.8 percent), and Bridgeport, where sales increased by 39 transactions (41.1 percent).
Twelve of the 21 city neighborhoods that experienced increased or steady sales were on the South and Southwest Sides. Two were west, and six were north. A year earlier, none of the 22 neighborhoods with increases or steady sales were on the North Side.
"We’ve noticed that the average sales price this year has increased noticeably from a year ago reflecting the fact that the upper end of the market has been more active than the entry level,” said Mark Zipperer of RE/MAX Edge in Chicago’s Lake View neighborhood. “I think stories about the difficulty of getting a mortgage has scared off some first-time buyers.”
However, Zipperer expects first-time buyers to be much more active next year.
"Interest rates for mortgages seem likely to decline in the months ahead and sellers are increasingly willing to negotiate on price,” said Zipperer. “Best of all for entry-level buyers is the large inventory of both resale and new units. I think the coming months really will be a great opportunity for them.”
In the suburbs, Libertyville-Green Oaks in Lake County and Willowbrook in Cook County had the largest absolute increases, both gaining 25 sales. The greatest percentage gainers were Newark in Kendall County (100 percent) and Kenilworth in Cook County (79 percent). Others showing solid gains, included LaGrange Park and Yorkville.
Broadly speaking, activity along the North Shore held up relatively well, with Glencoe, Lincolnshire, Northfield and Winnetka joining Kenilworth among communities with increased sales.
"We’ve seen prices come down quite a bit in the last year, but in the last four months they seem to be leveling off,” said Allyson Hoffman of RE/MAX North in Northbrook, Ill. “I’m also seeing indications that first-time buyers are returning to the marketplace now that they feel things are more affordable.”
Nonetheless, homes still are selling more slowly than last year, according to Hoffman.
"The properties that are selling are either new construction, which remains quite popular, or existing homes that offer a good location, are in excellent condition and are well priced,” said Hoffman. “Even then, they won’t sell quickly unless they are properly staged and effectively marketed. It is just a very competitive marketplace even though the inventory of unsold homes in our area declined a bit this month.”
Among the Illinois counties in the Chicago metropolitan area, all saw a decline in home sales activity when the first nine months of this year are compared with the same period in 2006. The magnitude of the decline ranged from 15.5 percent in Kendall County, which also had by far the smallest number of total transactions, to 23.8 percent in Will County.
The size of the decline in transactions was similar in the other five counties: Cook down 19 percent, DuPage down 20 percent, Lake down 22.6 percent, McHenry down 23.4 percent and Kane down 20.6 percent. Though not a separate county in itself, the City of Chicago, where total transactions declined 13.4 percent, enjoyed the strongest home sales environment in the metropolitan area during the nine-month period.
