The year-over-year averages of existing home sales across the country were up 2.1% in November, according to the National Association of Realtors. This is the second month in a row that average home sales outpaced levels from the previous year. Although November 2014 home sales were up compared to the same period in 2013, total existing home sales were down 6.1% when compared to the previous month.
But existing home sales in the Chicago metropolitan region were a bit colder along with the weather as November sales declined 8.8% compared to the same period last year. “Illinois’ fourth coldest November on record had a negative effect on housing sales,” says Geoffrey J.D. Hewings, director, Regional Economics Applications Laboratory, University of Illinois. Still, the year-over-year median home price in the Chicago metro area climbed 7.1% to $182,000. “While prices continue to improve, the sales forecast for the next three months indicates declines on a monthly and annual basis. Foreclosure sales continue to decline as a share of total sales; good news on the one hand but extending the time for return to pre-bubble levels,” he said.
However, the anticipated seasonal decline may be short-lived as record low mortgage interest rates combined with improving economic conditions and strong consumer confidence could make 2015 a banner year for real estate. In fact, first-time home buyers accounted for more than one-third of real estate transactions in November, according to NAR. The number of first-time homebuyers has been slowly increasing and November marked the highest level so far for the year. Additionally, there were fewer all cash transactions and only fifteen percent of sales were investor purchases.
Typically, home sales start to pick up in the spring and revised mortgage rules that are expected to take effect later this year should make it easier for many homebuyers to qualify for a mortgage. It looks like it could also be a very busy year for Chicago real estate agents and brokers. “NAR applauds Fannie and Freddie’s commitment to homeownership by serving creditworthy borrowers who lack the resources for substantial down payments plus closing costs with its new down payment program,” says Chris Polychron, president National Association of Realtors®.