U.S. housing slumps hurts suburban sellers

Frustrated home sellers basically have two options in today's tough market -- wait it out or lower their price, the owner of a suburban real estate company said Wednesday.

"It's a frustrating time for a number of our home sellers," said Tom Kreuser, co-owner of Century 21 Kreuser & Seiler in Libertyville.

The reason can be seen in the Illinois Association of Realtors latest report, which shows that total home sales were down 4. 6 percent in August to 10,601 compared to July sales of 11,114 while year-over-year sales were down 27.2 percent from Aug. 2007 totals of 14,562.

On a national level, the median price fell 9.5 percent to $203,100, the largest price decline on record dating to 1999. Local realtors say that people are getting accustomed to the market and are taking advantage of steep discounts.

"What they're losing on the selling, they're gaining on the buy," Kreuser said. He added that interest rates are pretty good, resulting in some people's decision to make a move.

"We've seen a little more activity lately, particularly in the higher end of the market -- the $1.5 to $1.8 million range," Kreuser said. The monthly average rate for a 30-year, fixed rate mortgage for the North Central region was 6.52 percent in August.

Home prices continue to dip, according to reports released Wednesday. The Illinois median price in August was $195,000, down 7.1 percent from $210,000 in August 2007. The median is a typical market price where half the homes sold for more, half sold for less.

"Prospects for a rapid recovery of the housing market were significantly dampened by the turmoil in the financial markets," said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory of the University of Illinois.

"While the interventions by the federal government in the financial sector will help stem a more precipitous slide in the housing market, the longer-term recovery of this market will now be increasingly dependent on the economy's recovery. Continued job declines both nationally and in Illinois have generated a need to address economic development issues more forcefully," Hewings said.