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Chicago, IL - Latest New Home Sales Numbers Suggest Market Decline is Deepening

Posted on: May 06, 2012 09:19:50 AM

The Chicago, IL market saw a drop in new home sales year-over-year in January, and the percentage fall, which was steeper than December 2011, gave signs that the market may be worsening. New home sales saw a 21.4% fall from a year earlier to 243 after sales declined 15.2% in December from the year earlier.

A total of 4,902 new homes were sold during the 12 months that ended in January, down from 4,968 for the year that ended in December.

New home sales accounted for 3.4% of overall housing sales. They made up 4.2% of sales a year earlier. For new and existing homes, sales fell in January after also declining in December year-over-year.

Pricing and Mortgage Trends

In January, the average per-unit price of new homes dropped by 16.4% year-over-year to $297,557. This decline a drop off from the 22.5% fall in December from a year earlier.

The average mortgage size on newly sold homes saw a decline year-over-year in contrast to new home prices. The average mortgage size slid to $238,320 in January, marking a 13.1% drop compared with last year. Average mortgage size fell 14.5% in December 2011 from a year earlier. Of the overall sale price, the percentage that was being financed increased 3.0 percentage points year-over-year to 80.1% in January 2012. This was another rise after December 2011 when there was a 7.4 percentage point rise from a year earlier.

Other Market Trends

The percentage of new home sales belonging to single-family homes has risen from last year while the portion of new home sales belonging to attached units has dropped. Single-family home sales climbed from 50.5% of new sales in January 2011 to 59.3% of sales in January 2012. Meanwhile, attached units as a percentage of all new home sales declined to 40.7% of sales from 49.5% of sales.

For all new homes sold, the average unit size slid 13.2% year-over-year to 1,812 square feet in January 2012. A decrease in both the average size and price of newly sold homes was also seen in December 2011 when the average size jumped 24.2% to 2,128 square feet.

Foreclosures and real estate owned (REO) sales remained a burden on the market. Out of all existing home sales, foreclosures combined with REO sales accounted for 55.4% of sales. They made up 58.5% in January 2011. The percentage of existing home sales involving foreclosures slipped to 26.6% in January from 30.8% a year earlier while REO sales as a percentage of existing home sales rose to 28.8% from 27.7%.

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