Kendall real estate market recovering? : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
|Kendall real estate market recovering? |
|Report shows modest increases in home sales, prices for October |
|by Matt Schury|
Home sales in Kendall County continued to improve modestly in October as prices also rose slightly.
Countywide data published by the Illinois Association of Realtors (IAR) shows 160 homes were sold this October compared to 132 last year. The year-to date data shows 1,487 homes sold between January and October of this year compared to 1,317 homes sold during the same time last year.
The same report shows prices inched up from a median of $156,000 last year to $165,000 this year.
Ron Ewing, president of the Realtor Association of Fox Valley, says the trend is a good one but the housing market is still fragile.
"Without something catastrophic happening, I would say the spring market is going to be very strong as well," he said.
Meanwhile the inventory of homes in Kendall County is going down.
The existing inventory in Kendall County totaled 4.7 months in November, according to Ewing; a sharp decline from when the inventory peaked at 23.6 months in December 2010.
"We've made steady progress in dwindling the supply of inventory, so that's huge," Ewing said.
The supply of existing inventory refers to the average amount of time it currently takes to sell a home at fair market value. Ewing said he considers 3.4 months of inventory a "balanced market" which is when equal buyers and equal sellers are on the market.
"Obviously some homes sell faster and some homes sell slower but that's the average supply of inventory that we have based on the current inventory," he said.
Previously, even though the inventory had been going down, people were still losing value in their homes, which offset that trend.
"The median home prices have also stabilized and they have actually stabilized since March 2012, which is really good news because we are not losing any more value in our homes as well," he said.
The IAR's report for October shows 68 Illinois counties reporting year-over-year sales as well as median price increases.
"Yes, we do expect a strong finish to the year as well," he said. "And equally strong will be the spring. We are making progress again year-over-year and so I anticipate that the spring market is going to be fairly robust," Ewing said.
Lower priced homes are tending to sell, as buyers look for bargains, Ewing explains.
"If you look at that segment of the market, the higher end homes tend to be on the market longer than that lower-end priced homes, not in value but just that segment of the market seems to be turning over rather quickly," he said.
Additionally, many investors are continuing to buy up those homes and turning them into rentals.
"I don't see a lot of flips going on but I do see a lot of investors purchasing homes and converting them to rentals," he said. "The need for rentals is fairly high because of so many foreclosures and short sales. Those people still have to live somewhere and, as Realtors, we put them in rentals."
Oswego leads in sales
Looking at individual municipalities in Kendall County, the year-to-date data is mixed, according to an October report from the Midwest Real Estate Data LLC.
The median price for attached homes in Yorkville fell 17.2 percent from a year ago, the most significant price drop in the county.
However, the largest gain in median price was found in detached homes in Yorkville, which increased 2.6 percent year-to-date.
Oswego had the most home sales year-to-date. The village also saw the only increase in homes sales in the county compared to 2011 with about a 33 percent increase in sales compared to last year.
In Oswego, 470 homes sold year-to-date in 2012 compared to 353 in 2011. The median price for detached homes last year was $219,500 compared to $230,000 this year. Attached homes sold for a median price of $110,000 in 2011 compared to $105,944 this year.
Yorkville saw an 11.3 percent decrease in homes sold and Plano saw a four percent decrease.
Year-to-date 276 homes were sold in Yorkville in 2012 compared to 311 in 2011. The median price for detached homes this year was $200,000 and $195,000 last year.
Plano's home sales were down slightly while prices were up slightly for attached homes and down for detached homes.
Plano saw 168 homes sold year to date in 2012 and 175 in 2011. This year the median price for a detached home was $100,550 compared to $115,250 last year. The median price for attached homes was flat at $60,750 this year compared to $60,000 last year.
In 2011 the median price of an attached home was $74,000 compared to $90,000 this year.
Kelly Michelson, a real estate broker with Coldwell Banker Honig Bell, said she doesn't see major changes in housing prices compared to 2011, but sees other indicators that predict a strong finish to 2012.
"I think it is still too soon to predict what next year will hold, but I can only encourage buyers to move forward with their dream of owning a home," she said. "There is a myth out there that financing is hard to get, and that the banks don't want to loan money. There is nothing farther from the truth. Banks are ready to lend, and most buyers are going FHA (Federal Housing Authority), which require very little down payment, typically 3.5 percent."
Fiscal cliff worries
According to Michelson, there is still concern among Realtors that the so-called "fiscal cliff" could affect the housing market if Congress doesn't act to prevent it.
For instance, she pointed out that the mortgage interest deduction is currently being threatened.
"The National Association of Realtors (NAR) has made a clear call for help to sustain the housing market's progress in their 'Call for Action: Do No Harm to Housing,'" Michelson said.
As stated on their website, "NAR's position is that the mortgage interest deduction is vital to the stability of the American housing market and economy and we will remain vigilant in opposing any future plan that modifies or excludes the destructibility of mortgage interest."
She added that, many people also like to spend that money on home improvements.
"If the government taxes us more, people will not have extra discretionary funds to put back into our homes, shop, or provide extras including entertainment for our families," Michelson said.
Ewing points out that a law that prevents the deficiency in short sales from being taxed is set to expire Dec. 31. If that happens someone who short sold their home would have to pay the tax on the deficiency, he said.
Additionally, Ewing points out that the mix of program and tax cuts in the fiscal cliff would affect the entire economy, including the housing market.