Housing market stays slow; some say it's back to normal

Housing market stays slow; some say it's back to normal
By Mary Umberger
Copyright © 2006, Chicago Tribune
Published November 29, 2006

With the housing boom becoming an ever-more-distant memory, Chicago home sales took another hit in October, and real estate experts are saying wait until spring. Or until next fall. Or maybe longer.

The Illinois Association of Realtors said Tuesday that October's combined single-family and condo sales in the Chicago area were 15.4 percent below last year's sales. Prices, however, still clung to positive territory, inching upward by less than 1 percent from the year before. The median price paid for a single-family home in October was $242,000.

Statewide, home sales fared slightly better, dropping by 9.7 percent in October, the Realtors said. The median price declined, year over year, by 3.5 percent, to $198,777.

Chicago-area condo prices fell about 5 percent, although prices still were up by about 3 percent, according to separate data prepared by the association for the Tribune.

Area real estate agents said the numbers reflect a return to a "normal" market, though they conceded that the boom went on for so long that most home sellers have forgotten that buying traditionally slows to a crawl in autumn, when kids have returned to school and buyers are concentrating on the holidays.

"Everything has been so hyperexaggerated" over time, said North Side agent Pamela Ball. "I don't think the market is bad, it's just normal for fall in a normal year."

Pat Callan, a Realty Executives broker in Wheaton, said sellers who have reduced their prices are improving the logjam of properties for sale in DuPage County, where sales of all types of homes declined by nearly 28 percent in October.

"It's stratified, to some extent, as far as what moves," Callan said. "The higher-end properties aren't moving, but the lower and middle are starting to move."

Callan said he expects an uptick in activity in February, when the traditional "spring" market begins, but others are less optimistic.

Paul Kasriel, chief economist for Northern Trust in Chicago, said he doesn't expect significant improvement soon.

"I don't think we're going to bottom out on this thing till the latter part of next year," he said, commenting on a separate report from the National Association of Realtors that showed that nationwide sales stayed flat, while prices sank.

The NAR on Tuesday reported that existing sales of all types of homes rose one-half of 1 percent in October, to a seasonally adjusted annual rate of 6.24 million units, though they were 11.5 percent below the 7.05 million unit level in October 2005.

Callan said many consumers have accepted the changed marketplace and are reducing their asking prices.

"It's not across the board," Callan said. "But with sellers adjusting their expectations, buyers are coming back into the market."

But Ball said anything that is selling tends to be distinctive.

"It's the property that's well done and well priced, and people are waiting for it," she said. "But if you've got a condo on Sheridan Road, for example, and your box is like 400 other boxes, well, it's slow."

Robert Zoretich, president of the Illinois Association of Realtors, also said the market is normalizing. But he said that more sellers are going to have to rethink their price expectations in order for the market to pick up.

"There are still people out there waiting to see prices come down," he said. "But buyers are not listening. They're really not. If people need to sell right away, they need to adjust their prices."

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mumberger@tribune.com