In two weeks the Illinois Association of Realtors will release their home sales stats for Chicago for the month of October and they will once again trumpet the increase - this time 8.7% - over last year. But the truth of course sounds like a broken record: last year at this time sales had been moved into the first half of the year as a result of the government's homebuyer giveaway program. Moving those sales back into last October where they belonged would mean that this October is probably the lowest sales level in around 14 years. For instance, October sales were almost 15.4% below 2008 levels, which was a pretty bad year.
To make matters worse 44.4% of those sales were distressed - either short sales or foreclosures. As the graph below shows that is close to a record high for this time of the year.
Clearly only the best bargains are moving.
The good news remains the home sale contract activity. Check out the graph below. Despite being below 2009 levels for the most recent months, home sale contracts have been at least running ahead of 2008 levels, which is odd, given that closings are running behind 2008 levels. As I've pointed out before, it's taking much longer for contracts to close and, to some extent, more contracts are falling off the face of the earth now. It is likely that this higher contract activity will translate into higher sales levels sometime soon.