Metro Chicago sales up, prices down in second half of 2011

The following market update arrived via a news release from RE/MAX Northern Illinois:

The metropolitan Chicago real estate market enjoyed a solid six months of home sales activity during the last half of 2011, recovering from a lackluster performance during the January-June period to achieve a small increase in transactions for the year, according to an analysis of home-sales data by RE/MAX. A total of 70,137 detached and attached homes changed hands in the seven-county metro area last year, 1.2 percent more than in 2010.

Sales during the July-December period of 2011 were 13.2 percent higher in the metro area than during the first six months of the year. Second-half sales totaled 37,203 homes and accounted for 53 percent of all 2011 sales. In both the third and fourth quarters, sales were 20 percent higher this year than last based on transactions recorded by Midwest Real Estate Data, LLC.

Home prices, however, continued to decline over the course of year. The 2011 median home sales price in the metro area was $164,000, 11 percent lower than in 2010.

“An important factor in the continuing price decline is the impact of distressed property sales,” noted Laura Ortoleva, a spokesperson for the RE/MAX Northern Illinois real estate network. “Distressed sales, which include foreclosures and short sales, rose 10.6 percent last year to 29,481 units, or 42 percent of all home sales, up from 38.5 percent in 2010. A rising percentage of distressed sales almost certainly contributes to a lower median price.”

In its analysis of sales activity, RE/MAX looked at each of the seven counties in the metro area, as well as the City of Chicago. The number of homes sold in 2011 rose in six of the seven counties, with Cook being the lone exception. Cook County sales fell 2.7 percent, a decline attributable to the fact that 7.4 percent fewer homes sold in Chicago during 2011 than in 2010. The suburban areas of Cook County recorded a 1.9 percent increase in sales.

Here are the increases in sales activity levels found in the other six counties: DuPage up 7.8 percent, Kane up 8.7 percent, Kendall up 13.4 percent, Lake up 5.2 percent, McHenry up 6 percent and Will up 3.9 percent.

Fourth-quarter results were uniformly more upbeat in all seven counties when compared to the same three-month period in 2010. Sales activity rose 15.9 percent in Cook, 18.7 percent in DuPage, 23.3 percent in Kane, 36 percent in Kendall, 21.6 percent in Lake, 31.3 percent in McHenry and 35.5 percent in Will. In the City of Chicago, home sales during the fourth quarter topped 2010 results for the same period by 10.9 percent.

Distressed Sales
Sales of distressed homes grew even more rapidly during the fourth quarter than total sales. Sales involving foreclosures or short sales totaled 7,669 units, an increase of 33.7 percent compared to the final quarter of 2010.

Short sales are accounting for a growing percentage of the distressed market, at least based on 2011 results. They represented 31.4 percent of all distressed sales last year, up from 29.2 percent in 2010, and by the fourth quarter, short sales accounted for 35.5 percent of all distressed transactions for attached and detached homes.

The percentage of home sales involving distressed properties varied considerably between counties within the metro area during 2011, with the most densely populated counties, Cook, Lake and DuPage, registering the lowest percentage of distressed sales: 34 percent in DuPage and 41 percent in Lake. In Cook County distressed sales represented 42 percent of all transactions, including 41 percent in Chicago.

Conversely, RE/MAX found that it was the somewhat more rural counties on the western edge of the metro area – Kendall, Kane and McHenry – where distressed sales represented the highest percentage of home transactions: 55 percent in Kendall, 49 percent in Kane and 50 percent in McHenry. Distressed sales accounted for 44 percent of the activity in Will County.

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