Sep 24, 2008

Housing Bulletin—Where the Sales Are

In its October 2008 issue, Chicago presents its annual residential real-estate chart, which, among other things, reveals how many homes were sold this past year in nearly 300 city neighborhoods and suburbs. There wasn’t space to show how those sale numbers compared to last year, but in the ongoing housing meltdown, the huge decline in the number of homes sold is a figure worth knowing.

The big news is that the number of homes sold plummeted across the Chicago metropolitan region. During the 12-month period covered by the chart (July 1, 2007, to June 30, 2008), 91.4 percent of the 287 neighborhoods and suburbs on the chart experienced a downturn in the number of sales since last year’s survey. Some places showed only a small drop in sales volume—Northbrook, Palos Heights, and Park Ridge were among the towns where the drop was less than 5 percent—but a great majority of the communities saw declines that exceeded 25 percent.

Just 6.6 percent of the communities on the chart sold more houses this year than last (more on them below). Of the 210 suburbs on the chart, 206 saw a decline. Of the 77 city neighborhoods (where the chart tracks sales of both single-family homes and of condos and townhouses), 65 experienced a decline in the number of single-family homes sold, and 62 saw condo sales go down. By now, the reasons behind those declines are relatively well known: too much available inventory, particularly of newly built homes; greatly tightened lending standards that are keeping some buyers out of the market; and a reluctance among both buyers and sellers to make a transaction in a falling market, buyers because they don’t want to pay more than the house will be worth later, and sellers because they hope that if they sit out this market, they can sell later, when prices are better.

Many real-estate observers have said the drop in sales may have a useful corrective effect: if homeowners who don’t need to sell but only want to look for a bigger, better place are keeping their houses off the market, that lightens the inventory load. This helps move some of the newly built houses—and those existing homes whose owners really need to sell (because of a job transfer, a death, or a divorce)—off the market sooner.

Here are the neighborhoods and suburbs where sales volume increased in the last year. These charts only include those communities that had more than ten sales both this year and last.

Posted at 07:16 AM in Housing Bulletin | Permalink

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