A pair of reports on the local real estate market paints a complex picture – both the spark of recovery and caution about declaring a turnaround too soon.
The Woodstock Institute, a nonprofit group that has tracked foreclosure activity throughout the region since the real estate collapse, reported in August that the number of foreclosure filings dropped dramatically during the first half of 2013 in Brookfield, North Riverside and Riverside, continuing a trend that began in the second half of 2012.
In addition, Midwest Real Estate Data LLC, which provides the Multiple Listing Service to real estate agents throughout northeast Illinois, reports that median home sale prices in Brookfield, North Riverside and Riverside all inched up in the first half of 2013 compared to final numbers reported in 2012.
It’s the first time since 2006 that median real estate sale prices in all three villages have inched up over the prior year’s results. In Riverside the median sale price of a single-family, detached home through June 30 increased by 8.8 percent to $334,500. In 2012, the median sale price was $307,500.
In Brookfield, the median sale price during the first half of 2013 rose 3.5 percent to $167,450 after finishing 2012 at $161,750. North Riverside’s median sale price, meanwhile, rose 2.1 percent to $170,000 after finishing 2012 at $166,500.
“The biggest thing I’m seeing is our inventory is down,” said Joan Wiaduck, broker/owner of Gaslight Realty in Riverside. “Most of the homes under $500,000 have been selling. With a combination of mortgage rates still staying low and not as much inventory, buyers are getting off the fence.”
But Wiaduck indicated that it’s still a buyers’ market out there, with selling prices, at least in Riverside, landing about 18 percent lower than asking prices.
“The percentage of what a house sells at compared to the original list is all over the map,” Wiaduck said.
Karen Arndt, a real estate agent with particular experience in North Riverside, said that while prices are picking up slowly, activity has increased greatly.
“There are more buyers now than I saw just a few months back, and it was strong then,” said Arndt. “I think everything’s on a big uptick.”
But it might be best to hold off celebrating the righting of the real estate market, says the think tank that has been tracking Chicago-area foreclosure trends since the real estate collapse of 2008.
“While the decline in new foreclosure filings could indicate good news for the Chicago region housing market, it’s too soon to know for sure,” said Spencer Cowan, vice president of research at the Woodstock Institute.
While new foreclosure filings are down, the number of properties exiting the foreclosure process is up sharply in both Riverside and North Riverside. With almost all of those properties now owned by banks, the homes are often in danger of remaining vacant for a long period of time.
“The continued high levels of completed foreclosure auctions, however, suggest that the Chicago housing market still has a long way to go toward recovery,” Cowan said. “These auctions often translate into more vacant properties that pose significant long-term challenges to neighborhoods.”
According to data provided by Woodstock, the number of new foreclosure filings in Brookfield during the first six months of 2013 fell by 46.5 percent compared to the first half of 2012.
The 47 new foreclosure filings in Brookfield during 2013 — there were 88 during the first half of 2012 — are also lower than the 59 filings reported in the second half of 2012.
In Riverside, where in 2012 foreclosure filings hit their peak since the recession began, the number of new filings fell by 71 percent in the first half of 2013 compared to the first half of 2012.
Riverside saw just 11 new foreclosure filings from January through June 2013. During the first half of 2012, Riverside reported 38 filings, with another 14 during the second half of the year. At the present rate, Riverside could end 2013 with the fewest number of new foreclosure filings since the recession began.
North Riverside appears to be on the same track as Riverside. New filings are down 72.4 percent during the first half of 2013 compared to the first half of 2012. The eight filings reported in the village this year represent a new low for any six-month period since 2008 and is less than half of the 19 reported filings in the second half of 2012, when the slowdown began.
But in Riverside and North Riverside, the decline in new foreclosure filings have been accompanied by a sharp increase in the number of completed foreclosures — auctions, that is, in which properties almost always end up in the hands of the lender.
Riverside had 12 completed foreclosures in the first half of 2013, compared to the seven it saw in the first half of 2012, and is on track to top the 19 completed foreclosures in all of 2012. Of the 12 auctioned properties, 10 went to the lender.
In North Riverside, where there had been just nine completed foreclosures in all of 2012, there were 15 completed during the first six months of 2013. That’s more than any full year in the past five years.
But while median home sale prices in all three villages rose slightly during the first half of 2013, sale prices remain far below high-water marks before the crash.
Between 2007 and 2012, the median sales price of a home in Riverside fell 39 percent, from $503,500 to $307,500, according to Midwest Real Estate Data.
In Brookfield, the decline was worse between 2006, when that village topped out on median sales price, to 2012. Brookfield’s median sales price during that time fell 41.2 percent from $275,000 to $161,750.
In North Riverside, where the median sales price inched up in both 2012 and the first half of 2013, the median sales price fell 42.5 percent from $287,000 in 2006 to $165,000 in 2011.
One factor that clearly has changed is that the housing market is beginning to open up again. Sales are way up in all three villages during the first half of 2013 and the time those properties spend on the market has plummeted in both Brookfield and North Riverside.
In Riverside, 58 single-family, detached homes sold during the first half of 2013. Between 2007 and 2011, Riverside averaged 65 total sales per year. In 2012, sales activity increased to 105 sales, but 2013 is on pace to eclipse that mark.
Brookfield is also on pace to match pre-2007 sales totals, with 120 sales logged during the first six months of 2013. The last time the village had more than 200 home sales in any year was 2006, when 202 properties sold. Between 2008 and 2011, Brookfield averaged just 129 home sales annually.
North Riverside home sales began to perk up in 2012, when 76 properties changed hands — more than any other year from 2005 forward. With 32 sales during the first half of 2013, North Riverside is on pace for its second-highest number of annual sales since 2005.
The average time for a home to sell through June 30, 2013 was about three months in both Brookfield and North Riverside. At the height of the recession, there were periods average market times were more than six months.
In Riverside, between 2008 and 2011, average market time was more than seven months. That fell in 2012 to about 5.7 months but rose again during the first six months of 2013 to about seven months.