Chicago Housing Market Glance - April 2010
Chicago Home Sales Up Almost 50% in March, Gen Y is the Next Wave of House Hunters, Home Buyer Tax Credit Expired… Now What?
Chicago Home Sales Up Almost 50% in March
Sales of existing single-family homes and condos in Chicago shot up 49.7% in March from the same month a year ago. The numbers were released in late April from the Illinois Association of Realtors. There were over 600 more transactions this March than last with a total of 1,814 residential properties sold in the city of Chicago (as opposed to 1,212 in March ’09). It is the seventh straight month in a row of home sales improvement. Condos sales experienced an especially good month with a 63% gain from this past February and a 55% jump from March of the previous year.
This dramatic spike in buyer activity was seen throughout the Chicago metropolitan region and the entire state. Home sales rose 45% in the Chicago-area, resulting in more than 6300 homes sold during the month of March. That’s the highest number of sales for March since 2007. Throughout Illinois, Cook County reported a 50.8% year-over-year increase, Kane County had a whopping 72.5% leap, DuPage sales soared 51.8%, Lake County went up 39.1%, and homes sold climbed 31.6% in Will County.
Gen Y is the Next Wave of House Hunters
Generation Y is coming of age and its members are surging into the marketplace at a pace of 4 million people per year. Gen Y is considered the most expansive segment of consumers since their parents’ generation (the Baby Boomers) and they will become the largest group of home buyers in the next 5 – 10 years. The Gen Y set is still young (between the ages of 15 and 28 by most accounts), but many have already begun to purchase real estate.
Of course, this tech-savvy bunch is not going about the house hunt the old-fashioned way. Remember, Gen Y grew up with Internet, cell phones, handheld computers, and other technological advancements that keep this generation on the grid 24/7. They are accustomed to instant communication through texts, Tweets, and Facebook updates and their No. 1 source for information is the web. The advent of social media is another important part of Gen Y’s personal interaction with the outside world, which is why many realtors have started using social networking as a way to reach potential clients. Everything from blogging on local market trends to Twittering about new listings can engage the interests of Gen Y-ers who are looking to purchase a property.
A number of home builders are planning ahead for the next decade of home buyers by studying Gen Y preferences and what they want in an abode. According to surveys, the Gen Y crew favors smaller spaces over sprawling ones with an affordable price tag (from the $150,000s) and garage parking. The formal living rooms and dining rooms of their parents’ homes are out and the versatility of the flex plan is in. Low-maintenance, ground-floor level, and proximity to amenities are top priorities. Other bonuses are green features, a video-gaming room, natural finishes and on-site exercise facilities.
Home Buyer Tax Credit Expired… Now What?
The federal home buyer tax credit ended on April 30th. So what’s in store for the housing market now? Analysts predict a continued wave of finalized sales through June 30th, which is when eligible buyers have to be closed in order to cash in on the tax credit. However, activity will not be as strong as it was in the period prior to the tax credit expiration and a small portion of the potential sales are likely to fall through.
Chief Economist of the National Association of Realtors Lawrence Yun says we can expect to see a lower sales volume in the next few months, followed by a self-sustaining level in the latter part of 2010 and into 2011, as long as employment figures improve.
One survey shows house hunters are not going to be deterred from buying just because they can’t get the $8,000 anymore. A report from Prudential Real Estate reveals that consumers truly think now is a good time to purchase property before prices start to go up. According to the study, 65% of the 1,000 home shoppers surveyed indicated the expiration of the tax credit would not affect their interest in purchasing real estate. Forty-six percent said they thought local home prices would start to rise in the next year and nearly 80% believed we’d see increases in five years’ time.
