The Illinois Association of REALTORS® just released sales data for second quarter 2011. Sales volume peaked in June and July as it typically does following the Spring market. There is typically a 45-60 day time lag between contract and closing of a transaction. So a property put under contract in April and May will normally close in June and July. The Regional Economics Applications Laboratory (REAL) at University of Illinois reports that after the Spring sell off, we can expect a softer market through the remainder of the year. This is typical of the seasonal trends in the real estate market  - and this year should be no exception.

However, Director of REAL – Geoffrey J.D. Hewings, PhD – reports that he sees signs that prices may be moving away from the bottom and may even begin to increase slightly. Data indicates that the downward trend in prices is sputtering out and there is, in fact, some upward pressure on prices.

The number of transactions were up significantly from Q2 of 2010. July 2010 suffered a steep drop off in transactions due to the expiration of the first time home buyer tax credit. (To qualify for the credit, buyers had to close their sale by June 30, 2010). Even after adjusting the numbers for the tax credit, the numbers for July 2011 were on par with 2009 trends.

Sales in the <$100k price category are almost at pre-recesssion levels – indicating what we in the industry already know: that the strength of the market currently lies with investors taking advantage of deep discounts in the REO market. Sales <$200k represent nearly ⅔ of all transactions. As price increases, however, the spread of supply and demand widens – with properties priced at the top (over $700k) seeing the widest disjunction between supply and demand.

Stratification of sales by region in July:

[Data Source: National Association of REALTORS®]

Nationally, Kiplinger reports that while sales of new homes remain at nearly historic lows (they are predicting only 320,000 for this year), sales of existing homes will match last year’s total of 4.9 million. Kiplinger also reports that price declines are decelerating. They expect to see prices nationwide flatten out in early 2012 and begin to increase by the end of 2012 – citing the downward pressure of foreclosures on values.

As the chart of sales of existing single family homes below shows, however, prices in Cook County and Illinois on the whole have already seen a flattening out.

Q2 Sale of Existing Single Family Homes in Illinois:

*The Chicagoland area is defined by the U.S. Census Bureau and includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry, and Will.
Data source:  Illinois Association of REALTORS®