Palos Park Like Most Housing Markets: Prices are Down

Reta Wegele has been selling homes for 17 years. She's seen good markets and bad ones. But she's never seen a housing market quite like the one she's working in now.

Wegele, an agent with Coldwell Banker Residential Brokerage, says that the troubles of the national economy have hurt even the prestigious Palos Park housing market. Home values here are down, and sales are sluggish.

The suburb, which has long featured pricey homes, has seen housing prices drop dramatically from 2007. The average sales price in Palos Park had fallen more than $226,000 from 2007 through the end of 2009, according to data from the Mainstreet Organization of Realtors.

But Palos Park's housing market is no worse off than any other across the country, Wegele said. Every market is down today. And while Palos Park is no exception, the market here is doing better than many others across the Chicago region, she said.

"It's just like you hear on the news, every market has declined," said Wegele, who ranks as the top-selling real estate agent in the Palos Park market. "It's taken sellers two or three years to face reality. They can't sell their homes today for what they could sell them back in 2004 or in 2005. We're in a new reality now."

Wegele is far from alone. The real estate professionals selling homes in Palos Park all agree that this suburb, with its large wooded lots, strong schools and peaceful roads, is well-poised for a housing market rebirth once the national economy's recovery finally gains momentum.

But until that day comes, Palos Park's housing market will behave like most others: Housing sales may rise, but home values won't.

A big problem here, as in most markets across the country, is the high number of foreclosed properties glutting the market. It's not easy for homeowners to sell their properties for high prices when a foreclosed home two doors down is on the market for $50,000 less.

"Sellers here are still competing with the bank-owned properties and the foreclosures," said Kathy Toscas, a real estate agent with RE/MAX Team 2000 in Orland Park. "Housing values here won't get to a more normal level until we get all these properties off the books. Ideally, it'll only take another year-and-a-half to get rid of the bank-owned properties. Once we can eliminate those properties, then it should take three to five years more to see some kind of stabilization."

The declining prices are causing at least one positive effect: Home sales are slowly rising. Sales rose in 2009 and are on pace to rise again this year.

"Buyers have realized that purchasing in Palos Park now is a good value," said Diane Lynch, an agent with Realty Executives Premiere in Wheaton. "They realize that they can get more home for the price today. So they're looking to buy here."

Lynch points to the declining price of the entry-level four-bedroom house in Palos Park. In 2008, she said, buyers could purchase this house for $300,000 to $360,000. In 2009, buyers could find the same house for about $320,000, she said. And in 2010 they could nab this home for $285,000 to $295,000 Lynch said.

According to statistics from the Mainstreet Organization of Realtors, homes in Palos Park sold for an average sales price of $605,982 in 2007. That number dropped to $462,141 in 2008 and $379,086 in 2009.

Those numbers are gloomy. But the agents working in the Palos Park market do express hopes that the area's housing market will bounce back strongly once the national economy gains strength.

There's a simple reason for this: Buyers want to live in Palos Park. With its large lots and wooded land, Palos Park still has a reputation as one of the most prestigious of Chicago's south suburban communities.

"Palos Park has always been a strong market," said Patricia Brown-Wyrick, a real estate agent also with RE/MAX Team 2000. "The homes here tend to be older. They might need more repairs, but they sit in incomparable settings, wonderful settings. This is still a wonderful place to live. Palos Park's housing market is struggling. It's been affected in a negative manner by the economy just like everywhere else. But I wouldn't say Palos Park is struggling any more or any less than is any other market. It might even be a little on the plus side of the equation because of the unique nature of the market."