Sales down but prices good

While the number of homes sold in many suburbs dropped in 2007, average sales prices have been much more stable.

In many suburban towns prices actually rose a bit when 2007 sales are compared with 2006.

For the year, total home sales -- single-family and condominiums -- in the Chicago area reached 92,656, down 20.5 percent from 116,527 sales reported in 2006. The Chicago region median home sale price for 2007 was $254,000, up 2.4 percent from $248,000 in 2006. This report is from the Illinois Association of Realtors.

Leaders of local Realtor associations stressed that conditions in the Chicago area have not shown the extreme ups and downs found in other regions of the country.

More Coverage PDF Suburban home prices

However, January statistics were gloomy, which the state association blames at least partially on the weather.

In the Chicago area sales of 3,926 were down 34 percent from the same month in 2007. The median home sale price for the region was $239,700 in January, down 2.2 percent from $245,000 in January a year earlier.

This was the first drop in prices since at least 1998 and the largest drop in sales numbers in the same period, said Ann Londrigan, senior editor for the Illinois Association of Realtors.

Sellers do seem to be adjusting to the fact that they need to ask lower prices than during boom times, said Chris Gardner, who sells from the Arlington Heights office of Prudential Properties Northwest.

However, she thinks prices in the Northwest suburbs where she works have remained stable considering the national economy.

She also said buying has picked up in recent weeks, with price and condition the main attractions for buyers.

The sub-prime mortgage crash and its effect on the industry have hurt the local real estate market, said Kay Wirth, president of the Illinois Association of Realtors.

"This is very unfortunate because right now is truly one of the best times ever to get into the market and opportunities for home buyers," said Wirth, broker with RE/MAX Unlimited Northwest in Crystal Lake.

Interest rates seem to be volatile but are under 6.5 percent for 30-year fixed rate loans.

Besides that low rate, values are good and buyers have many choices, said Wirth.

"Homes were never intended to be a commodity like stock that you buy and expect to have an increase in price tomorrow," she said.

"It's a long-term investment where you live and where you can grow equity. History tells us that over a 10-year period on average most homes close to double in value. But there are ups and downs."

Investors who expect to turn homes over very quickly for profit have been eliminated from the market, said Wirth.

Christine Klein, president of the Realtor Association of the Fox Valley, agreed.

"If you're shopping for the next home for your life there are great deals out there," said Klein, a broker with Century 21 New Heritage in Hampshire.

Buyers do not have a sense of urgency because there are so many homes on the market, said Piero Orsi, president of the Realtor Association of NorthWest Chicagoland.

His company, RE/MAX Showcase, has offices in Long Grove, Gurnee, Lake Forest and Waukegan.

Business is improving, said Orsi, but he predicts it will be a long time before it returns to the levels of three years ago.

Sales in higher price ranges have suffered from the reduction in types of mortgages that let people stretch to buy more expensive homes, said Linda Dore, president of MainStreet Organization of Realtors, which represents DuPage County and Cook County's South and Southwest suburbs.

She is a broker agent with RE/MAX Team 2000 in Orland Park.

Some towns on the North Shore showed tremendous price escalation in 2007, said Kris Keller, president of North Shore-Barrington Association of Realtors.

For example, he said the median price in Lake Forest rose 23 percent, Northfield went up 39 percent and Glencoe 22 percent.

In Barrington sales dropped 25 percent to 226 single-family homes and average sales prices slipped 3 percent to $606,839.

An economics laboratory affiliated with the Illinois Association of Realtors predicts sales will rebound in most areas of the state next month.

"The uncertainty in the national housing market has penetrated into the Illinois economy, although the volatility is more muted than for other parts of the country, especially the major metropolitan areas and states like Florida," said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory of the University of Illinois.

"Most metropolitan statistical areas in the state can expect to see the usual rebound in sales in March," he said.