We're still more than 2 weeks away from the February home sales release from the Illinois Association of Realtors but I can give you a pretty good idea of what it's going to show for Chicago - if you read past their characteristically upbeat headlines. My preliminary numbers show Chicago home sales down about 14% from last year, which is about where we've been running lately. However, last year at this time sales were goosed by the government interference in the housing market program (that damn tax credit). So it's no surprise that sales are down vs. last year - and as the year progresses the comparisons are going to get even tougher so look out for some huge negative numbers. That's why it's also good to compare the numbers to 2009 and when you do that you see that sales were up by 22%. In other words, we've seen worse.
The other part of the story here is that we are still seeing a huge percentage of distressed home sales in Chicago - either short sales or foreclosures - and that percentage is the highest it's ever been since we could confidently measure those numbers. In February approximately 52% of all closings were distressed. You can see the trend in the graph below.
Both January and February were a bit higher than 2010, which ran higher than 2009 in the last half of the year. I purposely don't show January and February for 2009 because the fields that track this in the MLS might have been too new back then to accurately reflect the numbers.
In addition, I always look at contract activity as well and we're seeing some encouraging signs there. As you can see in the chart below, January and February contract activity was comparable to 2010 levels despite the fact that the government giveaway program is not in place this year. In addition, contract activity is running a bit higher than this same period in 2009, despite running close to 2009 levels in November and December. So the housing market may be ready to turn the corner.