While home sales are improving for the first time in three years in much of Illinois, the champagne corks aren't flying yet in the worst economy since the Great Depression. Homeowners and real estate agents alike are nearly holding their breath, taking a cautious attitude about the market.
The federal backed tax credit, low mortgage rates and lower priced homes triggered the spark in sales in Chicago, but in the Windy City things are well known to be explosive, especially when it comes to anything that deals with politics. The political winds change all the time in Chicago and it will be a long battle before housing markets in Illinois come to a point of stabilizing.
The upward momentum in home sales will be extended with the expansion and extension of the home buyers' tax credit into spring time. The impact of the government back stimulus program has given the Chicago market a move in the right direction. But in Chicagoland home prices are still falling and they will be on that path until the market finds footing to stabilize. Chicago home prices are forecast to deflate an average of 10.2% in 2010.
Interest is growing in Chicago from all over the world as the home of President Obama. But in other parts of Illinois markets are dealing with tougher times.
| City |
Forecast |
| Chicago |
− 10.2% |
| Peoria |
− 7.1% |
| Springfield |
− 3.7% |
| Bloomington |
− 2.4% |
| Decatur |
− 7.4% |
In Decatur, where home values have dropped to 2002 levels, sales have climbed, but the inventory of homes is still mushrooming with rising foreclosures. Foreclosures in Decatur and the rest of the state, ailing from higher property taxes and losing population, will see eroding home values. Decatur average housing prices are forecast to decline 7.4% in 2010.
In central Illinois, Peoria home prices have been battered through the downturn, although foreclosures have only had a minor impact. The foreclosure market in Peoria is really only coming from job lay-offs. The city's biggest employer, Caterpillar has laid-off thousands in the recession, and prospects look dim for a rebound soon.
The troubled economy has made it tough in Central Illinois. Foreclosures are projected to have a growing affect on the local market, and will send housing prices lower in what otherwise is one of the state's most affordable markets. Peoria is forecast to see average home values decline 7.1% in 2010.
In the Twin-Cities of Bloomington and Normal housing sales were boosted by the federal tax credit, and are projected to keep up an improving pace even through the normally sluggish winter months. Move-up buyers can now also take advantage of the federal tax credit, which should act to give the market further momentum. But all the government engineered market manipulation will have trouble breaking the barrier to stabilization until consumer confidence improves. Bloomington home prices are forecast to deflate a marginal 2.4% in 2010.
In Illinois capitol city of Springfield, the housing market has experienced the trends elsewhere with the federal tax credit. But the boom that went bust has still left an over supply of homes on the market. The inventory is seeing more foreclosures as more and more homeowners walk away from their homes, damaging the marketplace. Springfield is forecast to see home values decline and average of 3.7% in 2010.
