While median sale prices in the local real estate market continue to be soft and foreclosure filings have risen in 2012, there appears to be a ray of hope, according to sales figures for single-family homes through the end of June 2012.
In the second quarter of 2012, not only did sales activity increase significantly over the first quarter, the median sales price of single-family homes in Brookfield, Riverside and North Riverside all spiked in the second quarter.
“It’s definitely picked up from last year at this time,” said Judy Jisa, broker/owner of Burlington Realty in Riverside. “If you look at houses under contract, everything is under contract. There isn’t that much inventory right now.”
What may be even more of an indicator that the local real estate market has hit bottom, however, and may be poised for some sort of rebound is that the drop in median sales prices since 2007 appears to have finally leveled off.
The first six months of 2011 represented an absolute plunge in home prices in all three villages. From 2008 to 2010 during the first six months of the year, Brookfield and North Riverside home prices dropped steadily – between 6 and 11 percent – while in 2010 Riverside home prices actually recovered somewhat.
During the first six months of 2011, sale prices fell through the floor. Compared to the same period in 2010, the median sales price for a single-family home in Riverside fell 24.7 percent in 2011. In Brookfield and North Riverside, the median price fell 23.8 percent, year over year.
Through the first quarter of 2012, sales figures remained fairly dismal. According to Midwest Real Estate Data, which provides real estate sales figures for the multiple listing service for northern Illinois, the median sales prices for homes in all three villages were down to their lowest levels since the real estate crash of 2008.
In Riverside, for example, just 14 single-family homes sold for a median price of $277,500 in the first quarter of 2012. But in the second quarter of 2012, activity and sales prices jumped.
But from April through June in 2012, there were 31 home sales at a median price of $352,500, a 27 percent increase in median sales price from the first quarter.
Year over year through the first six months, the improvement is dramatic in Riverside.
Through the first six months in 2011 there were 28 sales with a median price of $280,000. In 2012, there have been 45 sales at a median price of $325,000.
While that median sales figure for 2012 is still lower than the median sales price through the first six months of 2011, the rate of the decrease has slowed considerably.
Compared to the first six months of 2011, the median home sale price fell in Riverside by just 1.5 percent in 2012. In Brookfield the median price was 3.6 percent lower, year over year, while North Riverside saw a half-percent increase – its first since the real estate crash of 2008.
According to Sheila Gentile, a Riverside Realtor who works for Coldwell Banker Exchange in LaGrange, the increased activity is due to several factors, including increased consumer confidence, sellers who have a more realistic understanding of the market and historically low interest rates.
“Buyers who have been sitting on the fence have come off the fence and are ready to buy,” said Gentile.
Another contributing factor, said Gentile, is the rental market. The inventory of rental units is also low, and the ones that are available are coming at a premium. The resulting high rents have pushed some would-be renters into buyers.
“I have had rental clients that have turned into buyers due to their frustrations within the rental market,” Gentile said.
While the performance of the market, particularly in the second quarter of the year, has been strong, it’s too soon to tell if it’s an indicator of the future. With a presidential election on the horizon in November, Realtors say they expect sales activity to slow.
But there are signs that the market is finally coming around.
“I do believe we are at the start of a turnaround,” Gentile. “Historically, sales tend to slow a bit as we come close to an election, but I haven’t seen that beginning to happen yet this year.”
The one segment of the real estate market that continues to be slow, said both Jisa and Gentile, is the high-end segment. According to Gentile, there have been just three sales of homes in the $800,000-plus price range in Riverside and none priced at more than $1 million this year. Last year at this time, there had been four such sales and one at more than $1 million.
However, for homes in the median price range, sales are happening. The inventory of homes on the market is down 16 percent compared to this time last year, said Gentile, and part of the reason for that is homes are not on the market for as long.
Well-priced homes that “show well” are moving.
“Properties that meet this criteria are selling with multiple offers within just a few days on the market,” Gentile said. “These quick sales that are happening are certainly bringing down the average market time.”