The Illinois housing market is setting up to be in better shape as a result of millions of dollars in aid from the federal government. High unemployment, terrible foreclosures and declining home values are stalling Illinois markets from recovery, despite an increase in home sales resulting from the federal tax credit.
Illinois is suffering from the fallout of the housing crash so badly that the federal government has targeted it for more than $166-million in aid for unemployed and under-employed workers to help pay their mortgages. The figure represents the third highest in the U.S. right behind California and Florida.
Home buyers are finding more affordable homes as a result of the lower prices, triggering a surge in sales during the first part of the year. That increase should be aided by a decline in foreclosures as a result of the federal aid. But the transition from a hurting market to stabilization will take at least a matter of months.
The impact of the government backed program should help Chicago, the home of President Barack Obama. Home sales are projected to ease before federal stimulus money starts to make a dent in the troubled market. But the prices on homes and condos should start to show an improvement at least towards the end of the year. Chicago home prices are forecast to decline a lesser 7.2% on average as a result of conditions that are expected to improve.
High property taxes and rising joblessness are hurting the market in Decatur, where the values on homes dropped to near 2000 year levels. Foreclosures remain a menacing problem in Decatur, where the population has dwindled as a result of job losses and businesses that have closed due to the hurting economy. Decatur average housing prices are forecast to decline 6.5% for the year.
In Peoria home prices are generally lower than in Chicago and other metro areas located around Chicagoland, and as a result didn’t experience the spiraling inflation of other areas. But the prospects for more hiring by the areas largest employers looks dim for the time being, which indicates that the housing market won’t see any sort of a rapid recovery.
The central Illinois economy is troubled like most of the state as foreclosures having a growing impact on the market. However, the federal program should strengthen the market as it helps mortgage holders pay their payments. Peoria is projected to sustain just 5.3% in average housing deflation for the year.
In Bloomington and neighboring Normal home sales were boosted by the federal tax credit, but a weak local economy and a market that deescalated later than most other areas is projected to be sluggish over most of the rest of the year. Home sales should be elevated by the federal aid, but prices are forecast to decline an average of 4.2% in 2010.
Further down state Springfield saw a spike in sales from the tax credit, but most of that has winded down as the state capital awaits more federal help. A supply of lower priced foreclosures should drive sales in the latter part of the year in Springfield, forecast to see average housing values decline at just 3.2% by year’s end.