Oak Park:

The number of single-family homes that sold in Oak Park during the first quarter of 2010 (42) was slightly higher the first quarter from 2009. Further, the average sales price of $407,249 was 8.1% higher than Q1 of 2009.

Additionally, the average market time dropped 47.5% from 179 (6 months) in Q1 2009 to 94 (3 months) in Q1 2010.
While this is some of the best real estate news our market has seen in some time. I would caution that the first quarter is by far the slowest of the year. The low number of transactions can sometimes lead to "adverse selection" (i.e. more large homes selling than smaller ones skewing the average).

I look forward to seeing if this trend continues into the second quarter. Anecdotal evidence suggests that the second quarter, aided by the Federal Housing Stimulus, should be strong. The real test will come in the third quarter when the stimulus incentives are no longer impacting the market.

River Forest:

The number of single-family homes that sold in River Forest during the first quarter of 2010 (18) increased by 50% over the first quarter of 2009. However, the average sales price of $581,166 was a 28.5% lower than Q1 of 2009 ($763,000). Further, the average market time nearly doubled from 181 days (6 months) in Q1 2009 to 330 (11 months) in Q1 2010, indicating continued weakness in the overall market.

Since the first quarter is historically the slowest in terms of transaction volume, I am always concerned about "adverse selection" (i.e. more large homes selling than smaller ones skewing the average or vise versa) when looking at Q1 market info. Accordingly, it is prudent to look at the trailing 12-months of data vs. the previous 12 months.

Unfortunately, this larger sample size confirms the downward direction of property values, with the average sales price from the past 12 months ($675,655) 23% lower than the previous 12 months ($878,897). Average market time has increased as well, increasing from 163 days (5 months) to 182 days (6 months).

The sole positive indicator is the number of sales, which increased 11.6% to 77 transaction in the past 12 months compared to 69 transactions in the previous 12 months. While some of this increase is likely due to the Housing Stimulus offered by the federal government, it is somewhat encouraging to see buyers coming back to the market.

Transaction volume is an often overlooked indicater for property values. However, it is critical that transaction volumes remain at or above current levels in order to keep downward pressure off of seller to reduce prices.

If you have any questions about the market or your home?s value, feel free to contact me at John.Plepel@EscrowRE.com or call me on my cell phone at (708) 790-8705.