Thousands of Chicago homeowners are slowly regaining real estate value lost during the Great Recession, expert say.
Single-family homes in the Chicago area lost an average of 28 percent of their value between 2007 and 2012 when the market hit rock bottom.
However, the rising resale values of 2015’s spring market has stuffed some hefty amounts of cash back into many beleaguered homeowner pockets, reported the Illinois Association of
Realtors, which noted “sharp gains in year-over-year home sales and median prices” in March.
“When adjusted for inflation, median home prices have recovered to 79 percent of their 2008 levels statewide and 74 percent of the prior levels in the nine-county Chicago area,” noted Geoffrey J.D. Hewings, an economist at the University of Illinois, who predicted it would take another one to three years for values to fully recover.
A total of 2,118 single-family homes and condominiums were sold in March of 2015, up 13 percent from last year when 1,875 homes were sold. What’s more important is the median price of a home in Chicago jumped 11.9 percent to $263,079 over March of 2014 when the median price was $235,000.
“Chicago’s spring market is showing bounce with back-to-back months of sales increases signaling strengthening demand,” said Hugh Rider, president of the Chicago Association of Realtors.
Chicago Realtors noted that hot city neighborhoods this spring include: the Near West Side, Albany Park and Dunning on the Northwest Side, and West Lawn and Ashburn on the Southwest Side.
“Even with fewer homes on the market, we’re seeing determined buyers finding their ideal home,” Rider said. “This increased demand is moving median sales prices higher, offering homeowners an incentive.”
Rock-bottom home loan rates also helped buyers get off the fence. Freddie Mac reported that benchmark 30-year fixed mortgage rates averaged 3.65 percent in late April, compared with 4.33 percent a year ago.
In the nine-county Chicago area, homes and condo sales in March of 2015 totaled 8,158 units, an increase of 11.5 percent from the 7,314 sales in March of 2014. The median home and condo price in March in the Chicago area was $204,000, up 16.6 percent from $175,000 in March of 2014.
“Buyers are becoming quite aggressive when it comes to shopping for a home this spring,” said Jim Kinney, president of the IAR and vice president for luxury sales for Baird & Warner in Chicago.
“The surge in sales and median prices throughout the state in March clearly shows consumers know they have to be willing to pay more as they face a slightly smaller number of homes on the market this year versus last,” Kinney said.
Bargain-hunters shopping for foreclosures may receive a boost from a new Fannie Mae and Freddie Mac pilot program that plans to sell thousands of vacant, foreclosed homes in Chicago and suburbs.
The two agencies plan to offer about 3,800 homes, condos and two- to four-flats for sale to qualified nonprofit groups and their developers.
The worst of the blighted properties will be offered for as little as $1. Other residences that can be rehabbed likely will be sold at a discount of up to 20 percent.
Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. For more information, visit www.escapingcondojail.com.