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Chicago area home sales soar to highest level since July 2007

Joe Dilallo his home Westchester Ill. Wednesday September 19 2012. Dilallo recently closed home. | Andrew A. Nelles~Sun-Times Media

Joe Dilallo at his home in Westchester, Ill., on Wednesday, September 19, 2012. Dilallo recently closed on the home. | Andrew A. Nelles~Sun-Times Media

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Updated: October 21, 2012 2:39PM

In continuing signs of improvement in the housing market, sales of existing homes in the Chicago metropolitan area jumped 28.5 percent last month from a year earlier, hitting the highest level in more than five years, according to a report from the Illinois Association of Realtors released Wednesday. But the median price fell 3.8 percent to $170,000.

In Chicago, sales and the median price increased.

“We’re up year-to-date about 28 percent. We’re riding the wave,” said Zeke Morris, operating principal and managing broker at Keller Williams Realty in Hyde Park and president of the Chicago Association of Realtors. He said prices are attracting buyers.

There were 9,240 homes sold in the Chicago area last month, the most homes sold in a month since July 2007, when 9,730 homes were sold, and up from 7,188 in August 2011.

The news came the same day the National Association of Realtors said U.S. home sales rose 7.8 percent to the highest level since May 2010, when sales were aided by a federal home-buying tax credit. At the same time, builders broke ground on 2.3 percent more homes and apartments in August than July. The Commerce Department said the annual rate of construction rose to a seasonally adjusted 750,000.

In the city of Chicago, sales rose 23.6 percent from August 2011 to 2,209. The median price rose 3.9 percent to $200,000. Prices have risen year-over-year in the city in five of the past eight months.

Interest rates that are hovering near record low levels are helping drive sales, said Loretta Alonzo, president of the Illinois Association of Realtors and broker-owner of Century 21 Alonzo & Associates in La Grange Park, where at the end of August the company had closed as many transactions as it did for all of last year.

Low rates encouraged Jenny Steward and her husband to close on a three-bedroom condo in the Logan Square/Bucktown area, which they bought for $347,000 last month. They made a down payment of roughly 12 percent and got an interest rate of 3.64 percent she said.

“We’ve been married about 18 months, and we’ve been saving,” she said. “We were watching interest rate trends and had a good feeling that this was going to be as close to the bottom as we could get.”

Joe Dilallo, who is getting married next year, said he is pleased with the 3.375 percent interest rate he got on the two-bedroom, two-bath home he closed on this month in Westchester for $175,000. He paid a little less than the initial asking price, he said.

“I’ve been at my place of employment a while and felt comfortable” he said of his decision to buy. “We found this was really affordable and is a house that looks like it should be more than what we’re going to pay.”

Increased confidence is helping to rev up home sales, according to Matthew Farrell, managing partner at Urban Real Estate in Chicago, where business is up about 25 percent over last year.

“It certainly helps that we have some of the cheapest financing available, but I think there’s also more consumer confidence that the market has bottomed out,” he said.

Statewide, sales of existing homes rose 23.7 percent to 13,264. The median price slipped 0.7 percent to $147,000.

Prices continued to be impacted by foreclosures, said Mabel Guzman of @properties.

Illinois had the highest rate of foreclosures in the nation last month, according to a report from RealtyTrac that showed 17,781 homes received a filing, up 42 percent from a year earlier and representing one in every 298 homes. Foreclosures spiked in Illinois and in other parts of the country this year, following declines last year that were created by documentation issues that slowed the process, creating a backlog. But those issues have since been resolved. It is expected to take less than three years to clear the active inventory of foreclosed properties, according to Dr. Geoffrey Hewings, director of the University of Illinois’ Regional Economics Applications Laboratory.

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