Florida Cheers, Illinois Groans Over September Home Sales
(SPRINGFIELD, IL and ORLANDO, FL) - They're up in Florida; down in Illinois. September sales of existing single-family homes and condominiums bring encouraging news to one sector; discouraging news to another. Prices, however, were down in both markets.
The 55,000-member Illinois Association of Realtors reports sales were down 8.7 percent to 9,686 units in this past September compared to September 2007 sales of 10,604 properties. The median price was $179,650, down 9.7 percent from $199,000 in the same 2007 month.
At the same time, the 125,000-member Florida Association of Realtors recorded a 24 percent increase on 10,817 sales versus 8,725 sales in September 2007. Sales of existing condos alone rose 11 percent in the year-to-year comparison. The median price was $175,100, down 22 percent from $224,700 at this time last year.
Sean Snaith, economist and director of the University of Central Florida Institute for Economic Competitiveness, says FAR's numbers represent the sixth month in a row that the sales figure has exceeded its 12-month moving average (average of the previous 12 months).
"This is a clear sign that the significant price declines that have occurred across the state are leading to a more rapid absorption of the housing inventory," Snaith says.
He notes, however, September 2007 was "a volatile time for the housing industry. The large percentage increase of sales this September versus September 2007 is inflated by the sharp decline in sales that took place in September 2007."
He adds, "That was the month following the initial wave of global fallout, precipitated by the subprime mortgage meltdown that roiled markets in August 2007."
Geoffrey J.D. Hewings
In Illinois, Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois, says, "If there was any good economic news in the last month, it would have to be the universal realization that the downturn in the economy has reached proportions that have many analysts suggesting it is by far the worst since the Second World War."
Hewings says "the fortunes of the (national) housing market are clearly challenged by the major downturn in the economy." Illinois lost a further 3,700 jobs in September for a total year-to-date job loss of 14,000.
Still, says Hewings, he hasn't given up hope for a housing recovery in the near future. "With the passage of the bailout plan and the international collaborative efforts to address the systemic problems of ailing economies, there some basis for optimism that a turnaround may be possible in 2009."
Pat Callan, president, Illinois Association of Realtors, says "positives (for the real estate market in the coming months) are the new tax credit for first-time buyers and increased loan limits on FHA-insured mortgages." But he cautions "some downward pressure on prices is expected as we move through the inventory of homes and some would-be buyers and sellers simply wait out uncertainty in the financial markets and economy."
The National Association of Realtors says the latest housing outlook emphasizes the importance of available credit to the mortgage market.
"Home sales will be constrained without a freer flow of credit into the mortgage market," says NAR Chief Economist Lawrence Yun.; "The faster that happens, the sooner we'll see a broad stabilization in home prices that, in turn, will help the economy recover."