Homes sales down, prices up in DuPage County
Foreclosures, plummeting home sales and troubles with subprime mortgages have grabbed headlines across the country this year, but the housing market in DuPage County hasn’t been all gloom and doom.
While the number of single-family homes sold throughout the county from January through November fell by 20.7 percent from 2006, the median sale price of those homes increased by 2.2 percent, according to statistics from the Main Street Organization of Realtors, a trade group in DuPage and the wider Chicago area.
Chris Read is chief executive officer of John Greene Realtor in Naperville and past president of the Main Street Organization. She said declining sales this year are a result of the market correcting for the flood of homes built in the last five years.
“The biggest (factor) is the oversupply in the market,” Read said. “We had a such a boom from 2003 to 2006. ... The supply (of new homes) overran the demand.”
Since mid-2006, the U.S. real estate market has been troubled by a rise in foreclosures due to homeowners defaulting on subprime mortgages, which are loans made to high-risk borrowers who otherwise would not be able to obtain financing to purchase a home. For all the attention subprime mortgages have received, they only account for about 7 percent of all home loans, Read said.
“2007 is down, but it’s still the fifth best year in the history of real estate,” she said. “It’s strictly normalizing back to what it was before the huge jumps in the last few years.”
As new home construction slows and some sellers take their homes off the market, the supply of homes will fall back in line with demand, she said.
Sheila McCann, director of outreach and development at the DuPage Homeownership Center, has seen the decline in consumer confidence in the real estate market firsthand. Enrollment in the center’s homebuyer education classes was down 22 percent this year compared to 2006.
Meanwhile, the number of clients seeking help from the center because they have defaulted on their mortgages or are in danger of defaulting has increased by 140 percent, McCann said. But most people the center sees aren’t defaulting because of increasing interest rates on subprime mortgages, she added.
“By and large, the biggest reason was a job loss and the next would be a medical crisis,” McCann said.
Read and McCann both said the market will improve in the coming year. Low interest rates and a stabilizing supply of homes for sale will make it a good time to buy a home.
“The biggest difference is there’s not going to be all these mortgage products there were on the market before,” McCann said. “And that’s probably a good thing.”