Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=119369
Story Retrieval Date: 5/18/2013 3:08:45 AM CST
The Pending Home Sales Index, which measures the number of sales contracts signed each month, fell to a seasonally adjusted 80.4 in January, its lowest level since tracking began in 2001, when the index value was set at 100, and down 6.4 percent from a year ago. The decline was worse than the 85.1 reading that economists had expected, according to Thomson Reuters.
In December, pending home sales had risen 6.3 percent to a downwardly revised 87.1, according to the trade group.
In the Midwest, the index declined 9.2 percent to 72.6 and is 13.8 percent below its January 2008 level.
A sale is listed as pending when the contract has been signed but the transaction has not closed. The sale is usually finalized one to two months after signing.
“Even with many serious potential home buyers on the sidelines waiting for passage of the stimulus bill, job losses and weak consumer confidence were a natural drag on home sales,” said Lawrence Yun, NAR chief economist.
"We expect similarly soft home sales in the near term, but buyers are expected to respond to much-improved affordability conditions and from the $8,000 first-time buyer tax credit," Yun added.
In the Chicago metropolitan statistical area, which includes Cook, DeKalb, DuPage, Kane, Kendall, Lake, McHenry and Will counties, the Zillow.com Home Value Index – the median value of all homes in the area – fell 10.2 percent in 2008 to $225,018. Nationally, the Home Value Index fell 11.6 percent to $192,119.
“We are also seeing more distress in the suburbs than in the Loop,” said Katie Curnutte, public relations manager at Zillow. “The northwest suburbs bore much of the brunt of the downturn.”
Several neighborhoods actually saw an increase in home values in 2008, Curnutte said, including the Loop, Douglas and North Lawndale in Chicago.
"It really does all come back to the job market," said real estate analyst Mike Weiss with Weiss Research Inc., in a research note. "The latest evidence suggests we're seeing little relief on that front. Jobless claims are rising sharply and layoff announcements are coming fast and furious."