Illiniois Home Sales Down 21.2% Statewide in the 3rd Quarter of 2008

In the news again is more real estate gloom and doom sprinkled, with a (small) silver lining…

The Illinois Association of Realtors posted a 21.2% decrease in home sales statewide which includes single and attached family home sales. Total sales were reported as 31,451 compared to 39,904 for the same quarter in 2007. The median home price also dropped 8.2% from 207,000 in 2007 to 190,000 in 2008.

In a the 3rd quarter report from the National Association of Realtors, 28 of the 152 metropolitan areas reported increases in median home sales for existing homes from 2007. 4 were unchanged and 120 metro areas experienced declines. Decatur and Bloomington Illinois median home prices were up 8.7 and 8.1% respectively.

The good news is that as the market continues to decline, homes are becoming more affordable for buyers who were pushed out of the market 3 years ago due to rapidly increasing home prices. First time home buyers, newlyweds, and recent college grads all have great opportunities to purchase a home in this market at a great price.

Short sales and REO (bank owned) homes present even better opportunities to head off the curve of the steady decline of home prices.

As homes become more affordable, and the economy begins to stabilize, buyer confidence will also begin to rise. Many first time home buyers are nervous that they could get a lower price further down the road, and thus end up paying too much for their new home today. The fear of many buyers is getting into a negative equity position in their first year of owning their home if they were to buy now. The other problem with getting buyers to the closing table has been the elimination of zero down financing and the lack of available credit. FHA loan guidelines were revamped as of October 1st of this year to require a 3.5% down payment on all purchases with the elimination of all seller assisted down payments, and restricted family gifting guidelines.

Oh, real estate is a mess right now…but so is the economy. I’ll be waiting with everyone else, looking for the light at the end of the tunnel.