Existing Homes Sales Boosted by Foreclosure Deals

Increased number of foreclosures available at deeply discounted prices caused July 2009 home sales in Chicago suburbs to rise to levels not observed in almost 10 years. The encouraging factor is that a lot of homes were sold to first time home buyers, not just savvy investors taking advantage of deflated home prices. The government tax credit is playing an important role here and, as most involved in real estate hope, will continue to boost sales of existing homes throughout the fall season.

While foreclosed homes sell fast, the inventory of privately owned real estate remains high. Some condo projects (as in this Rolling Meadows, IL subdivision) have over 10% of units listed for sale and very few of them changing hands, except for foreclosures and short sales. Some buyers even refuse to look at any other properties, just waiting until the “right deal” comes along.

All types of distressed sales have been deflating prices of homes in Chicago suburbs at 10-15% annually and as long as the supply of bank foreclosures is steady, nobody really expects homes to gain value any time soon.