Area Realtors say home prices stabilizing

Offers on property more numerous and realistic

One of the leading indicators of the country's economic health is found in the housing market, which has been marred for months with tumbling property values and record number of foreclosures.

But if a prediction by a real estate information and analytics provider is right, the decline of housing prices should finally end in fewer than six months.

In a report published during the last week of October, First American CoreLogic reported that home prices should bottom out by March 2010. One of the sources of this projection is recent figures indicating that while values are still declining, the rate of the decline is slowing.

In the Chicago-Naperville-Joliet market, home prices -- including distressed sales -- fell by 12.5 percent in August compared to the same period in 2008; the home price index was 13.3 percent comparing the same period in July 2009 versus 2008, and 14.4 percent in June.

Kevin Gillen, a spokesman for First American CoreLogic, believes the recent spurt in home buying activity and leveling-off in price declines "has been driven largely by the imminent expiration of the first-time homebuyer tax credit."

"With the expiration of this tax credit and the still-increasing foreclosure levels across the country, downward pressure on home prices will resume unless there are any other significant changes in the economic or policy environment," he said.

While news of a decline in the rate of devaluation is welcome, local Realtors say the hemorrhaging already has begun to stop.

"Frankly, I haven't seen prices slipping lower all that much for the past couple of months," said Skip Juckins, owner/broker of Naperville's Riverwalk Realty. "Things seem to actually have leveled off. A year ago, the market was completely dead, but today, there are actually buyers out there."

First-time home buyers are among the most active in the market, Juckins said, but a report he recalls reading suggested that the modest flurry of new activity has nothing to do with the government's stimulus package.

"There was a report I saw that talked about whether the tax incentive program should be extended, and the report suggested that first time buyers planned to buy a house regardless of whether the incentive package was offered or not," Juckins said.

As prices have stabilized, Juckins notes that offers are coming in that today seem much more realistic than bids earlier this year.

"No one pays the asking price of course, but there are offers coming in that are much more realistic than the low-balling we saw about a year ago," he said.

Theresa Ryan, owner of the local Ryan Hill Realty, said she has seen similar developments in the local market this fall. Multiple offers on homes are becoming more common.

"I also feel we are at or near the bottom in terms of values dropping," Ryan said. "The issue, I feel, is that the market is going to come back slower than it should. When you have the 'perfect storm' factors together that include the most affordable market in 40 years, a great inventory, low interest rates and a government incentive, you should have the pieces in place for a very aggressive market."

Despite all those positive elements, Ryan predicts the recovery will need at least 12 to 18 months to really kick in.

"Here in Naperville, homes are selling faster as a result of being competitively priced in order to compete with the short sale and foreclosure market," she said. "The recovery would accelerate even faster if it wasn't for the unemployment. In March of next year, I believe we will see a 'blip' on the screen, but we won't be in full swing. We do feel that pricing is at or near the bottom now."