Housing sales could drop again, real estate exec says

If the first-time homebuyer credit isn't extended beyond this year, the housing market likely will take another dive, a top real estate executive said Monday.

Dave Liniger, co-founder and chairman of the board of Re/Max International Inc., said the $8,000 stimulus money is finally starting to boost the beleaguered housing market - including homes throughout the suburbs. But the summer blip on the housing radar, following a rough start this year, likely is temporary.

"If the stimulus ends, or isn't even extended, you will see the market drop again," Liniger said.

Liniger was in downtown Chicago for a Re/Max meeting and talked about the turnaround and the future of real estate, especially after data released Monday showed suburban attached home sales fell 28.6 percent during the first six months of the year, while the number of detached homes sold declined 10 percent, after posting a 27 percent decline a year earlier. The data, compiled by Midwest Real Estate Data LLC also said condos didn't do as well in Kane, DuPage and Kendall counties, while Will and McHenry showed a slightly better market for them.

To help those numbers, Liniger wants to see the stimulus for housing be extended or even expanded to include everyone. But with so many other programs being included in the federal stimulus, such as Cash For Clunkers, Liniger is worried that too much cash is being pumped into the economy and how that flow could stop when the federal funding dries up.

"We're spending ourselves into oblivion," he said.

Still, he believes the housing crisis needs to be addressed first in order to fix the economy and help the employment ranks, he added.

In the short term, housing will have a gradual recovery, but the Chicago market will likely do a little better since it didn't have the higher-end homes similar to Orange County, Calif., or Las Vegas, Nev., which has higher foreclosure rates, he said.

In the long term, a generational factor could impact how people buy homes either in the city or the suburbs. The Baby Boomers likely will have three more transactions, on average, such as selling their larger home, downsizing to a smaller place, and then finally moving into assisted living or a nursing home.

The upcoming generations are likely to buy homes but may not necessarily move to the suburbs. They'll want downtown-type environments, Liniger said.

So suburbs that rejuvenate their downtowns, or those with already developed entertainment, shopping and high-rise housing, are likely to thrive.

"People want places where they can bike and walk and have things available," Liniger said. "People will gravitate to those areas."

Homes: Suburbs with entertainment will fare best