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University of Illinois Housing Market Forecast

In IAR's latest Housing Forecast from the Regional Economics Applications Laboratory, University of Illinois economist Geoff Hewings reports:

"Given the economy’s troubles, it is not surprising to find an impact on the housing market. While the interventions by the federal government in the financial sector will help stem a more precipitous slide in the housing market, the longer-term recovery of this market will now be increasingly dependent on the economy’s recovery. Continued job declines both nationally and in Illinois have generated a need to address economic development issues more forcefully."

• Forecasts for September, October and November suggest continuing declines in home sales compared to the same months last year ranging from 20-30% in Illinois and the Chicago PMSA.
• Price declines in Chicago for the same three months will move from 5% to less than 3% over the three months while the declines will be from 7% to 5% statewide.
• In August the unemployment rate increased in the U.S. from 5.7% to 6.1% while Illinois’ rate was virtually unchanged at 7.3%.
• Illinois’ recovery of its prior peak employment (November 2000) is more than three years away at current levels and may be extended if job declines continue.