The second quarter home sales and median price report issued today by the Illinois Association REALTORS® shows a housing market in a much stronger position than one year ago.

Sales are up statewide by 26.3 percent January through June 2010 compared to the same period in 2009. The statewide median price improved slightly as well amid downward pressures from foreclosures, short sales and more supply than overall demand.

We traveled to the campus of the University of Illinois in Urbana earlier this week to talk to Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) and the lead economist who develops housing market forecasts for the Illinois Association of REALTORS®.  He talked about the link between jobs and the housing market.

“I believe the housing market that really led the growth rates in the early part of this century are now very much tied to job growth. Most people are going to feel much better about making major purchases if they can have a sense that the private sector job growth is going to continue,” said Dr. Hewings. “As a result we will see a very strong relationship between home sales and job growth over the next six to 18 months, much more than we’ve seen in the past.”

Here are more observations from the 2Q10 IAR housing market report:

  • Buyers will find affordability levels very high at this time before the inevitable uptick in mortgage interest rates, which are currently at their lowest level in decades.
  • 30-year mortgage interest rates averaged 4.94 percent in the second quarter for the North Central Region (which includes Illinois)
  • 2Q10 marked the fourth quarter in a row for home sales increases statewide and in the nine-county Chicagoland region*
  • Statewide sales up 27.7 percent to 35,628 total home sales (single family and condos) compared to 27,890 in 2Q09
  • Statewide median price up 0.3% to $160,000; median price gains in all three months (April/May/June)
  • Chicagoland total home sales up 34.7 percent to 23,735 homes sold compared to 17,620 sold in 2Q09
  • Median price for the Chicagoland region down 2.5 percent to $196,000

* The Chicagland region in this report includes Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties.