Housing Prices Down, but Not Drastically, in Palos Heights

Bob Arnold, a real estate agent with RE/MAX Team 2000 in Orland Park, knows that falling housing prices have made life difficult for homeowners trying to sell their residences.

But Arnold also knows that lower housing values have given many buyers the opportunity to purchase a home in a city or neighborhood that previously would have been out of their reach.

Arnold points to Palos Heights as an example. According to the numbers from Midwest Real Estate Data, the average sales price of a home in Palos Heights stood at $323,000 during the period from August 2008 to August 2009. From August 2009 to Aug. 27, 2010, that average sales price had fallen to $271,000.

That 16 percent decline is significant. For some buyers, such a dip can make the difference between buying a ranch or a Cape Cod in Palos Heights instead of purchasing a home in a less expensive community.

Arnold just sold a home to a 36-year-old buyer who grew up in Palos Heights but had lived elsewhere after he graduated from college. This buyer had long wanted to move back to Palos Heights but couldn't afford the city's housing prices.

That changed this year.

"He is absolutely thrilled with the fact that he can buy a house in Palos Heights," Arnold said. "He's thrilled that he can return to a community that he considers home.

"Prices going down are a double-edged sword. People may not be getting as much for their homes. But the lower prices are providing opportunities for the people who do want to stay in or come back to the community. As a Realtor, I find that very exciting."

The median housing sales price in Palos Heights remains well above the national numbers. The National Association of Realtors reports that the median sales price of existing homes was $182,600 nationally in July. The median housing sales price for Palos Heights in July stood at $294,000 — though that median was calculated on just two housing sales.

The median sales price in Palos Heights, though, has remained largely consistent for several months. In June, it stood at $267,500. During that month, 11 homes in the city sold. In May, that figure was $265,000, while in April it stood at $288,750. 

The median sales price is not to be confused with the average sales price; the median price is that dollar figure at which half of homes sold for less and half for more.

Some Palos Heights homes, of course, do sell for far higher than the median sales price. The city's Westgate Valley, its newest subdivision, features homes priced in the range of $1 million, for example.

While the lower prices in Palos Heights may open opportunities for new buyers, they can make life difficult for those who bought during the height of the residential housing boom. That boom became a crash in late 2006. Home values have been falling steadily ever since.

"Those people who bought a house before the real estate bubble burst, they should be OK if they need to sell in Palos Heights today," said Suzy Frederickson, a real estate agent with RE/MAX Team 2000. "Unfortunately, those people who bought in 2004, 2005 or 2006, they will feel it if they are going to resell their homes."

Some sellers are still struggling with the new real estate reality, Frederickson said. They remember how much they paid for their home, and wrestle with the idea of putting it back on the market for less than that figure in many cases.

Unfortunately, sellers can't force buyers to pay more. Buyers know that housing prices have fallen. They won't make offers on overpriced homes, Frederickson said.

"If you look at the numbers, the homes that have stayed on the market the longest in Palos Heights are the lower-priced ones," Frederickson said. "That's because for many of them the owners started out listing them too high and have had to eventually drop their prices."

Sellers in Palos Heights can take heart in this: There are plenty of worse places in which to be selling a home today. Prices have held up particularly well in both the city's Westgate Valley subdivision and its Old Palos neighborhood.

"Prices have come down here — that's true," said real estate agent Patrick Duffy of Prudential Rubloff. "But the percent of the price drop in Palos Heights is significantly less than it is in other markets."