Some Encouraging Signs for Housing Market in Palos Hills

Bill Hanson is a realist. He knows the recession has hurt businesses and homeowners in Palos Hills.

But he doesn't think Palos Hills has suffered any more than other suburbs in the area.

"The economy has hit everybody really hard," said Hanson (3rd ward), one of two Palos Hills aldermen whose main focus is economic development. "Regardless of what city or county you live in, we are all going through the rigors of how to work though the foreclosures and the business vacancies. We are all experiencing challenging economic times in our respective cities."

The downturn in the national and local economy certainly has affected the Palos Hills housing market, with both housing prices and home sales either stagnant or falling. There are some signs of hope, though. Housing sales from January through July 2010 are trending slightly upward. This follows three years of falling or flat housing sales in the city.

David Dornbos, a real estate agent with RE/MAX Action, looks at the Palos Hills housing market and sees one that has taken a hit, but that also has fared better than many other markets.

Dornbos points to the Chicago-area housing market — which includes the city and its suburbs — as a whole: Housing sales in the entire region were down 11.5 percent from Sept. 1, 2009 through Sept. 1, 2010 when compared to the same period one year earlier.

In Palos Hills, though, unit sales (which include single-family homes and condominiums) are down only 6.4 percent for the same period, Dornbos said. His source is the sales figures from the Multiple Listing Service, the national online database of homes for sale.

Dornbos also points out that in six of the eight months so far this year, home sales in Palos Hills were higher than they were in the same month one year earlier. Dornbos cites the federal government's first-time home buyer tax credit, which provided a credit of up to $8,000 for buyers who purchased their first homes, for boosting sales in those months. That credit, though, expired at midnight on April 30. Housing sales in Palos Hills began to fall shortly afterward, Dornbos said.

"Everything is relative when you're looking at housing markets today," Dornbos said. "When you look at Palos Hills today, you realize that it could be a lot worse than it is. Yes, it's down, but not by as much as it could be."

A total of 55 detached single-family homes sold in Palos Hills in 2009, according to the Main Street Organization of Realtors. The same number sold in 2008, while 64 sold in 2007.

For the period from January through July of this year, 34 detached single-family homes sold in Palos Hills, according to the Main Street Organization of Realtors. That's actually up a tick — by two homes — from the same period in 2009, when 32 homes sold. In 2008, 29 homes sold during that period.

It's uncertain, though, how the continued struggles of the economy will impact housing sales in the city. The U.S. Department of Labor announced that the U.S. economy lost a total of 54,000 jobs in August. That's a lower number than expected, according to the Labor Department. But the national unemployment rate still rose slightly during the month, from 9.5 percent in July to 9.6 percent in August.

Some good news is that the housing inventory in Palos Hills is falling. This bodes well for home sellers here. When there are fewer homes to purchase, buyers generally have to make higher offers to acquire a residence.

Dornbos, citing numbers from the Multiple Listing Service, said there were 190 homes for sale in Palos Hills as of Sept. 2. That equates to about 14 months worth of inventory, he said.

"That number is coming down, slowly but surely," he said. "When inventory levels begin to reduce to normal levels, you'll see prices start to go up again. As long as there are high inventory levels, housing prices will continue to decline."

Dornbos said the Palos Hills housing market is well-positioned to rebound once the national economy begins to improve. The city offers a lot to potential home buyers, he said.

"Palos Hills features a great location," he said. "We are located close to just about everything. The schools here are rated well. The average price point for a house has always been about half of the amount of a lot of the homes in the suburbs right around Palos Hills.

"It's a more affordable suburb that offers a lot of amenities. People will continue to buy here."