How Important are First-Time Buyers in Chicago? Very.
January 25th, 2010 categories: Chicago Real Estate News
As a REALTOR®, I get a bit of a thrill every time I help buyers purchase their first home. Because I specialize in such North Side Chicago neighborhoods as Lakeview, Lincoln Park, Lincoln Square, Roscoe Village and Bucktown/Wicker Park (among others), I’m fortunate enough to work with first-time buyers quite often. These neighborhoods, with their variety of restaurants, entertainment options and shops, attract young couples and families.
But neither Chicago nor Illinois are unique. First-time homebuyers here make up a huge part of the housing market. In fact, you can credit these first-time buyers with boosting home sales last year.
The 2009 Profile of Illinois Home Buyers and Sellers, published by the Illinois Association of REALTORS®, reported that more than half of all the home buyers in the state last year were first-time buyers.
This isn’t a surprise. The federal government’s $8,000 first-time homebuyer tax credit helped encourage new buyers to invest in condominiums or single-family homes. At the same time, interest rates were at historic lows (and still are) and housing prices in Chicago were far lower last year, making it easier for first-time buyers to enter the market.
The survey showed that 51 percent of buyers in the state were first-time buyers last year. That’s slightly above the national average, in which 47 percent of all buyers were first-timers.
The survey included some interesting information about first-time buyers, especially if you’re a fan of statistics. The report said that the median age of first-time buyers in Illinois was 29. The median income among first-time buyers was $64,400. The report also said that 47 percent of first-time buyers used FHA financing, while 38 percent used a conventional loan to finance their purchase.
There were some interesting non-first-time-buyer statistics, too. According to the report, 67 percent of all buyers in the state purchased a detached single-family home, while 22 percent bought a condominium/townhome. In the state’s more urban city regions, including Chicago, 49 percent of the homes sold fit into the condo or townhome categories.
I expect first-time buyers to play an important role in the Chicago housing market in 2010, too. After all, Congress last year voted to extend and expand the first-time buyer tax credit. Housing prices will remain affordable and interest rates will remain low. This is a great time, actually, for first-time buyers to find a reasonably priced Chicago condo or single-family home.
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