Has America finally put the Great Recession in its collective rear-view mirror?
Nationwide, the 2015 spring home-buying season posted the best results in eight years since the beginning of the Great Recession in 2007, analysts report.
“Buyers have come back in force, leading to the strongest two months in sales since early 2007,” noted Lawrence Yun, chief economist for the National Association of Realtors (NAR).
Yun attributed the brisk sales to strong job growth, improved household finances and a rise in mortgage rates that are pushing Americans to buy now before rates climb higher.
After floating above 4 percent most of the spring and early summer, mortgage rates recently have eased. On August 6th, Freddie Mac reported that benchmark 30-year fixed home loans averaged 3.91 percent, down from 3.98 percent. A year ago at this time, the 30-year fixed loans averaged 4.14 percent.
Apparently lower rates are here in the nick of time. In the second quarter of 2015, the nation’s homeownership rate plummeted to 63.4 percent—the lowest level in 48 years, the Census Bureau reported. The last time homeownership was so low was in the first quarter of 1967 when the rate was 63.3 percent.
Chicago posted sales of 3,110 existing single-family homes and condominiums in June, up 9.3 percent from June a year ago when 2,846 homes were sold, reported the Illinois Association of Realtors (IAR).
The median price of a home in Chicago was $290,000, up 5.5 percent over June of 2014 when the median price was $275,000.
“Median prices in Chicago have increased steadily since October of 2012, providing a remarkable comeback story for the city’s real estate market,” noted Hugh Rider, president of the Chicago Association of Realtors (CAR) and co-president of Realty & Mortgage Co. in Chicago.
“Consumer interest remains keen, as shown by the month-over-month increases in sales recorded since February and the relatively short time it is taking to sell a home,” Rider said.
In the nine-county Chicago area, existing single-family home and condo sales in June totaled 13,100 units, an increase of 14.2 percent from the 11,470 units sold in June of 2014, the IAR reported. The median price in June in the Chicago area was $232,500, up 5.7 percent from $220,000 in June of 2014.
“Sellers keep reaping the rewards of a market that has continued to see median prices edge higher every month this year,” said Jim Kinney, president of the IAR and vice president for luxury sales at Baird & Warner in Chicago.
“The burst in June sales growth was unexpected,” said economist Geoffrey J.D. Hewings, of the University of Illinois. “Prices, however, are growing more modestly yet strongly.”
Hewings said the foreclosure inventory seems to be playing a diminishing role in terms of both sales and prices with “significant declines” in foreclosed properties in recent months.
Statewide, existing single-family home and condo sales in June totaled 17,972 units, up 12.5 percent from June of 2014 when 15,982 homes sold.
The statewide median existing home price in June 2015 rose to $194,243, an 8.5 percent gain over June 2014’s statewide median price of $179,000. The median is a typical market price where half the homes sold for more and half sold for less.
“A decrease in the number of days it takes on average to sell a home in Illinois shows that buyers are undeterred by the steady upward tick in prices,” Kinney said.
The time it took to sell a home in June averaged 63 days statewide, down from 68 days a year ago and faster than 72 days last month. Available housing inventory remained tight with 70,999 homes for sale, a 6.9 percent decline from June of 2014 when there were 76,287 homes.
Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. For more information, visit www.escapingcondojail.com.