May marked the ninth consecutive month for year-over-year home sales gains in Illinois, according to the Illinois Association of REALTORS® May housing market data report today.

Another good sign: median prices were up again statewide and in the city of Chicago.

Certainly what we’re seeing in these double-digit figures are sales prompted by the tax credit incentive that expired on April 30. It can take well over a month to close a home sale transaction in a normal market. In this one, given delays in the appraisal process and more time-intensive short sales, plus the sheer number of pending contracts in the pipeline—there is a concern that some who have already qualified for the tax credit will not make the closing deadline of June 30. REALTORS® are pushing for an extension of this closing deadline for those who have already qualified for the tax credit.

What will happen after all the tax credit sales are finalized? For the next three months (June, July and August), University of Illinois economist Geoff Hewings and his research team at the Regional Economics Applications Laboratory (REAL) offer these observations in their latest forecast prepared for IAR: 

  • Forecasts for June, July and August indicate sales increasing on a year-to-year basis statewide by 16 to 25 percent.
  • In the nine-county Chicagoland region* sales will increase in the 19 to 29 percent range.
  • Median prices statewide will be virtually unchanged over the three months.
  • Chicagoland median prices will be 4 to 6 percent lower than a year ago.

Jobs remain central to continue on the path toward stabilization.  “There is increasing consensus that the creation of private sector jobs will probably provide the most important stimulus for the housing sector,” says Dr. Hewings in the forecast. “While May employment data indicated significant growth, only 41,000 of the 431,000 gain in jobs were created in the private sector. However, job growth needs to accelerate just to keep pace with population growth and to accommodate the several million who are currently in part-time work but are seeking full-time positions.”

* Chicagoland nine-county region includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.