According to the latest home sales numbers from the Illinois Association of REALTORS®, December, 2011, existing-home sales in Chicago hit 1,536, up 6.4 percent from the 1,444 homes sold in the same month one year earlier.

The news wasn’t as good when it came to the median sales prices of these homes. According to the association’s numbers, the median home sale price for Chicago stood at $156,000 in December of last year. That’s down 6.2 percent when compared to the same month in 2010. Back then, the median sales price of Chicago homes came in at $166,250.

Bob Floss, president of the Chicago Association of REALTORS®, was quoted in the press release accompanying the December numbers as saying that the December rally was a good sign for the future of Chicago housing sales. The numbers give hope that Chicago’s winter and spring home-selling seasons will be strong ones, he said.

Floss, though, expressed concerns about the median sales price of Chicago condominiums and single-family homes. This number shows no sign of rising, and, in fact, continues to fall. Floss pointed to the large number of distressed residential properties on the market: Foreclosures tend to drag down the median sales prices of homes near them.

Until the number of foreclosures falls, don’t expect the median sales price of Chicago residential properties to rise.

The association press release also quotes Loretta Alonzo, president of the Illinois Association of REALTORS®. She says that buyers in December simply found too many good housing deals to pass up.

That’s good news, of course, for sellers trying to move their properties. It’s not great news, though, for sellers trying to get top dollar for their homes. Buyers today simply expect to find bargains on the condos and single-family homes that they purchase.

Crain’s quoted numbers from Moody’s Analytics saying that the Chicago-area economy should grow by about 1.6 percent in the first half of 2012 and by about 2 percent for the full year. These numbers sound positive until you consider that six months ago Moody’s predicted that the Chicago-area economy would grow by about 4 percent in 2012.

Crain’s points to the economic uncertainty caused by unstable financial markets and European debt worries. This, the story says, has made employers overly cautious when making new job hires.

Because of this, Moody’s is predicting that the unemployment rate in the Chicago area will jump to 11.4 percent in the first half of 2012. That’s up from 10.6 percent in the second half of 2011. Six months ago, Moody’s predicted that the Chicago-area unemployment rate would stand at 9.2 percent in the first half of 2012.

This is bad news, too, for the Chicago housing market. Buyers won’t be as willing to invest in a new home if they’re still worried about losing their jobs. And as Moody’s numbers show, Chicagoans have little reason to be optimistic about the safety of their jobs.

Just because a new year has started, it doesn’t mean that Chicago, and the rest of the nation, don’t still face serious challenges. Until unemployment finally falls, expect the Chicago housing market to struggle.

This latest news points out once again how important it is for home sellers to work with a skilled REALTOR® to set the right price for their condominiums or single-family homes. Buyers today are smart; they won’t overpay for a home. Those sellers who do set an unrealistic asking price will see their residence sit on the market for months, ignored by today’s savvy home buyers.

But there is some good news regarding the retail giant: Of the store closings the company recently posted on its Web site, none are located in Chicago or Illinois.

GlobeSt.com reported that Sears, in late December, listed 79 of the 100 to 120 stores it plans to close. Not one of these stores is located in Illinois, and GlobeSt.com wonders whether the large tax break that the state recently approved for Sears had something to do with this.

Also in December, Gov. Pat Quinn signed a law to give Sears a tax cut of $150 million during a 10-year period. This move came after Sears threatened to move out of the state.

This hasn’t been a good year for Sears. GlobeSt.com reported that the retailer saw its comparable store sales fall 2.6 percent for the year and 5.2 percent since late October. The 100 to 120 stores that Sears closes should save the retailer about $170 million, according to the GlobeSt.com story.

It’s possible to argue the merits of giving companies such large tax breaks. It’s possible, too, to debate whether Sears’ recent tax cut played a role in its decision to not close any of its Illinois stores.

But it’s not possible to argue that Sears’ decision to spare Illinois and Chicago any store closings is a boon to the area. And, remember, anything that helps the local economy also helps the Chicago-area housing market.

Buyers are more likely to spend money if they feel more confident about the local economy. And confident buyers are essential to the health of the Chicago housing market.

So there’s one thing to agree on here: The fact that Sears is keeping its Chicago stores open is good news for everyone in the city.

According to a recent feature story in the Chicago Tribune, the number of homes in the foreclosure process rose 20 percent in November in Cook County when compared to one month earlier. The Tribune said that much of this increase stemmed from a jump of 57 percent in the number of homes in the county that were sent to court-ordered auctions.

Citing data from online foreclosure company RealtyTrac, the Tribune reported that foreclosure filings were reported on more than 224,000 properties across the United States in November. That’s a drop of 3 percent from October.

No matter how you look at the numbers there are too many housing foreclosures in Chicago and the United States. This is unfortunate because foreclosure has such a devastating effect on families.

If you’re struggling to pay your mortgage bills each month, call your mortgage lender immediately. The sooner you call your lender, the better your chances of working out a new payment arrangement, a reduction in your mortgage loan’s interest rate or some other way to avoid losing your home through foreclosure.

I understand that this is no easy thing, calling your mortgage lender and explaining that you’re struggling to pay your monthly housing bills. But lenders will often work with you to find some solution to your mortgage woes.

Foreclosures remain the number-one deterrent to a housing market rebound, both in Chicago and across the nation. Foreclosures make it more difficult for sellers to get the prices they want for their homes. Buyers would rather pay $50,000 less for a similar home down the street that’s gone through the foreclosure process.

If you don’t want to become the latest foreclosure statistic, call your lender. Ignoring your mortgage problems won’t help them go away.

Think of it this way: Buyers are more than happy to spend $50,000 less on a foreclosed home or a short sale that sits three doors down from sellers trying to sell their similar residence the traditional way. Simply put, distressed homes sell for less, driving down the value of surrounding residences.

The Chicago Sun-Times, though, recently ran a feature story on an interesting new trend regarding foreclosure properties: According to the story, more of them are becoming rentals.

According to the Sun-Times story, more than one in 10 Chicago houses is now vacant. To help fill these empty spaces, the city and several nonprofit agencies are renting out a growing number of these properties. These groups are also offering buyers financial incentives to purchase these properties.

The Sun-Times story cites the efforts of the Neighborhood Stabilization Program run by the city and Mercy Portfolio Services. The program has received $169 million from the federal government in Recovery Act dollars, and so far has used some of these funds to pay for 51 demolitions and the purchase of 161 residential properties. The purchases are the interesting part of the equation: The residential properties total 819 housing units in 22 different Chicago neighborhoods. The Sun-Times reports that 75 percent of these housing units are for rent.

Foreclosures will continue to glut the Chicago housing market for years to come. There are just too many distressed properties on the market today. It’s good to see, though, the city and nonprofit agencies working together on creative ways in which to deal with them.

No one program will completely ease the burden that foreclosures and short sales place on the Chicago housing market. But the more programs that do attack this problem, the better.

But according to a story by the Wall Street Journal’s MarketWatch Web site, this isn’t the case. In fact, as the story points out, most renters today would rather own a home.

The MarketWatch story reports on a survey by Whirlpool Corporation and Habitat for Humanity, conducted by the National Association of Home Builders, that found that 68 percent of renters would rather own their own homes.

The survey also found that 60 percent of renters were concerned that their rents were too high. A total of 52 percent of renters said that they felt the money they were paying for electricity and gas was too high, too.

The survey shows the enduring strength of housing in the United States. Even during one of the most challenging times for the housing industry, U.S. residents, overwhelmingly, still believe in the American dream of owning their own homes.
There’s a reason for this: A house isn’t just an investment. It’s a place where families share memories, where children grow up. It’s a safe harbor in a sometimes stressful world.

And this is why housing remains so important to so many U.S. residents. It’s also why a down economy and a slumping housing market are not nearly powerful enough to derail the American Dream of homeownership.

It’s also why I advise my buyers to consider all the positives of owning a home. Yes, we want our homes to increase in value, something that, historically, they have, especially in strong markets such as Chicago. But buyers also need to consider the other benefits of owning a home. When they do, the majority of them recognize just how desirable owning their own home is.

First, the prices: According to the latest findings from the Standard & Poor’s/Case-Shiller home price index, home prices in the Chicago area dropped 0.8 percent in September when compared to August. They were also down 5 percent when compared to September of 2010.

Prices in the Chicago area today are at levels the area last saw in the spring of 2002, according to the Tribune story.

The “better” news? The Tribune also reported on the latest numbers from CoreLogic that showed that 24.9 percent of all homeowners with a mortgage in the Chicago area owed more on their loans than what their residences were worth at the end of September.

That number isn’t great. But it is better than the 25.2 percent of homeowners who were underwater on their mortgage loans at the end of the second quarter of this year.

Still, even with that slight improvement, 383,625 residences in the Chicago area were underwater on their mortgage loans at the end of September. Obviously, that number is far too high, especially considering nationally that only 22.1 percent of all residential properties with mortgage loans were underwater at the end of the same month, according to CoreLogic.

Both sets of numbers show that the housing market in Chicago, as in the rest of the nation, has a long way to go before it can be considered healthy again. The good news is for buyers: Home prices in the City, even in traditionally attractive neighborhoods such as Lakeview, Lincoln Park and Lincoln Square, remain affordable. Buyers today can find great bargains on good properties in the best locations.

According to a USA Today feature story, the percentage of consumers falling behind on their monthly mortgage loan payments fell during the third quarter. And in October, building permits for new single-family homes reached their highest level in 10 months.

According to numbers from the Mortgage Bankers Association, the share of mortgage holders who have missed at least one mortgage payment, but are not yet in the foreclosure process, dropped to 8 percent in the third quarter. In the second quarter of this year that figure stood at 8.4 percent.

At the same time, the share of mortgage holders more than 30 days behind but less than 60 days late on their mortgage loan payments fell to a four-year low of 3.2 percent, down from a figure of 3.5 percent one quarter earlier.

In even more good news for the struggling housing industry, permits for new home construction jumped 5.1 percent for single-family homes and 24 percent for multi-family units in October, according to data from the U.S. Commerce Department.

Of course, these two pieces of good news do not mean that the housing market is on the way back. As long as unemployment remains high across the country, the housing market will remain sluggish. And until we see fewer foreclosures across the country, don’t expect housing prices, in Chicago or across the country, to rise, either.

But the new numbers regarding permits and delinquencies do at least offer some hope. And when it comes to the U.S. housing market, hope has been in short supply these days.

It’s easy these days to get down on the U.S. economy. The recovery from the Great Recession hasn’t been strong enough to please anyone. The national unemployment rate is still too high. Housing values are stagnant. Home sales are down.

But, no less a financial guru than Sam Zell says that the U.S. economy is now on the right track. And that certainly qualifies as good news.

The Bloomberg news service covered Zell’s recent speech at a real estate conference in Chicago. According to the story, Zell told audience members that the U.S. economy will continue to improve and that high-quality real estate remains a wise investment.

I couldn’t agree with Zell more, especially when it comes to his thoughts on the value of real estate. I’ve argued during even the worst days of Chicago’s real estate slump that city housing remains a top investment. Yes, the value of Chicago condominiums and single-family homes is down now. But that just makes this an even better time to purchase local real estate.

Housing in Chicago’s top neighborhoods, places like Lincoln Square, Lincoln Park, Lakeview, Bucktown and Ravenswood, remains a solid investment. It’s true that no one can predict how home values will react over the years. But historically, home values have risen over time. The key is for owners to hold onto their homes for a long enough period of time – usually five years or more does the trick.

Buying a house was never meant to be a get-rich-quick investment. Remember, when you buy a condominium or single-family home, you get the benefits of living in that home. You also get tax advantages that you don’t get when you rent. You can’t say that about any other investment you can make.

During the days of the U.S. housing boom, buyers in Chicago were able to purchase condos or single-family homes in hot neighborhoods, fix them up and sell them for sometimes double what they initially paid, all in a few months’ time. That isn’t happening today.

But that doesn’t mean that owning a home is a bad financial investment. Though nothing is guaranteed, those homeowners who are patient will usually find that their homes are good investments.

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According to the most recent sales statistics from the Illinois Association of REALTORS®, the sale of single-family homes and condominiums in Chicago fell 19.5 percent in July from the same month one year earlier. In July, 1,589 homes were sold. That’s down from 1,975 homes sold in the same month in 2009.

Now, that number seems awfully bad. But it isn’t as bad when you consider that condominium and single-family home sales fell 27 percent across the nation in July.

Chicago home sales also look stronger if you consider year-to-date sales. Thanks in no small part to the federal first-time and move-up buyer tax credits, both of which expired on midnight on April 30, Chicago’s year-to-date home sales are ahead of what we saw last year.

According to the numbers from the Illinois Association of REALTORS®, Chicago’s housing sales from January through July were up 25 percent from the same period in 2009. So far this year, Chicago has seen 12,397 home sales. That’s far ahead of the 9,915 home sales the city saw from January through July of 2009.

If you’re still looking for bad news from the REALTORS® association, you can always study its median sales price numbers. The median price is an important one; it’s the figure at which half of homes sold for higher prices and half for lower.

According to the association, the city of Chicago’s median home price in July stood at $196,000. That’s down 19.8 percent from the $245,000 at which the median stood in the same month one year earlier. The year-to-date median sales price of $215,000 is down 6 percent. The median price was $229,000 for the period of January through July of 2009.

The point of all this isn’t to confuse home buyers or sellers. It’s to point out one fact: The Chicago housing market is a mixed bag of positive and negative news today. In that respect, it’s little different from the majority of housing markets across the country.

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