Illinois Sees Q3 Home Sales Fall 21.2 Percent

Total home sales in Illinois fell 21.2 percent during the third quarter while median prices fell 8.2 percent, according to data released Monday by the Illinois Assoc. of Realtors, as weakness in the Chicago metropolitan area colored the statewide statistics. Across the state, 31,451 homes sold in the third quarter at a media price of $190,000; that compares to a media of $207,000 one year ago, the realtor-led group said. Driving the real estate woes? A weakening statewide economy, according to one local academic. But if you ask the realtors in the state, apparently the issue is a lack of government action to lower interest rates or fund massive tax credits. Which means if you’ve wondered just how badly the credibility of realtors has been damaged by the housing crisis, look no further. “After a promising start to 2008, the Illinois economy has reverted to a pattern of job declines that follows the trends established nationally and in the rest of the Midwest. However, the rate of job losses in Illinois has been below that of the nation over the last 12 months and significantly below that of the rest of the Midwest,” said Geoffrey Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois. Illinois has lost 15,800 jobs January through Sept. 2008, according to government data. And that job loss is now driving much of the trouble in the real estate market, he said. In true realtor fashion, however, the IAR only highlighted thirty-eight of the state’s 100 reporting counties that saw prices appreciate during the quarter in its press statement — but made no mention of the 62 other counties, the majority of the state, that saw prices stagnate or decline in the same time frame. Places, for example, like Chicago. Total home sales in the Chicago MSA were down 22.1 percent in the third quarter to 20,449, compared to 26,257 home sales in the third quarter of 2007; median home prices were off 6.7 percent to $244,900 in the third quarter of 2008, the Illinois realtors group said. Yet, despite evidence of continued problems in Chicago, Pat Callen, broker-owner of Realty Executives Premiere in Wheaton, and president of the IAR, suggested that the results would have been better with interest-rate relief and more tax credits for home buyers. “The homebuyer tax credit incentive and more affordable home prices have helped prompt sales by first-time buyers and these buyers may continue to benefit if interest rates remain low and more tax incentives result from the economic stimulus plans,” he argued. The National Association of Realtors, along with some large realty groups, have been lobbying Congress to lower mortgage rates to 4.5 percent — perhaps on a teaser basis — in an effort to stimulate sagging demand. And weak response thus far to the first $7,000 homebuyer tax incentive approved by Congress last year has led the same groups to now push for tax credits over $20,000 — all, inexplicably, in the name of stabilizing the nation’s now-correcting housing markets. “Clearly the housing market is still unsettled. It is only natural at this time for all the participants to be looking to the new Administration to provide some direction for resolving the overriding economic issues we face,” said David Hanna, president of the Chicago Association of Realtors. “With the [NAR’s] newly proposed four-point housing stimulus plan, we are optimistic that Congress and the President will act to bring some tangible stability to the housing industry.” It strikes this author as disingenuous, at best, for anyone to suggest that outsized tax credits and government-subsidized mortgage rates could represent “tangible stability” for the housing market, for reasons that I hope are fairly obvious by now. Write to Paul Jackson at [email protected].