CRYSTAL LAKE – The bottom of what seemed like a bottomless pit may be at hand.
McHenry County’s residential real estate market appears to be leveling off after several consecutive years of declines. Last month, the average residential sale price here stood at $172,375. That’s less than one-fifth of a percentage point below the average sale price of $172,657 recorded in the same month in 2011.
It’s the smallest year-over-year decline in the past two years, according to statistics from the Heartland Realtor Organization, a professional organization for real estate agents in McHenry County. To be sure, prices throughout the county remain 30 percent, or more below the prices seen at the height of the housing boom. Nevertheless, there are some encouraging signs in what has long been a dismal marketplace.
For starters, the median sales price in May was actually 6 percent above the May 2011 median price of $142,400, said Rob Schaid, broker and owner of RE/MAX Plaza in McHenry.
“That’s the first time we’ve seen median prices go up year-over-year in the last four years,” he said. “Those who were waiting for the bottom missed it.”
Another good sign is the shrinking inventory of residential properties on the market. There were 3,098 units on the market in May. That’s the smallest number of units for any month in the last two years and a 28 percent decline from the 4,320 units listed in May 2010, Schaid said.
But not everyone is so optimistic.
“I think it’s too soon to call this a rebound,” said Kay Wirth, a broker with RE/MAX Unlimited Northwest. “Hopefully, we’ve hit the bottom and will start to see more stability.”
While real estate prices have started to go up in some parts of the country, McHenry County might lag behind, said Paul Hespen, a real estate agent with Prudential First Realty in Crystal Lake.
“It is going to take us a while to climb out of this,” he said.
A number of forces are holding the market back. Some would-be buyers can’t qualify for loans because banks have tightened lending standards.
Others continue to rent because they are worried home prices will fall even lower. And rising property tax bills push otherwise affordable homes out of range for some buyers.
“The high taxes are driving values down,” Hespen said.
Recently, activity has picked up in places such as Crystal Lake, Lake in the Hills and McHenry, said Kim Keefe, president of the Heartland Realtor Organization and a broker with RE/MAX Plaza in McHenry.
Higher-end homes – long a sluggish segment of the market – also are starting to sell. Most of those buying are investors or first-time buyers, but Keefe said she has started to see more homeowners who are looking to upgrade to bigger homes.
The pace of foreclosure filings in McHenry County also has slowed since hitting an all-time high of 3,635 in 2010. The number of foreclosure filings declined by 20 percent from 2010 to 2011.
This is good news because foreclosed homes sell for significantly less and tend to push prices down throughout the market.
Although the pace has slackened, foreclosures still plague many McHenry County neighborhoods.
Residents of Illinois Street in Crystal Lake witnessed a free-for-all at a neighbor’s house after the bank foreclosed on it.
The renters living 301 Illinois St. posted a listing on the website Freecycle.org when they moved out earlier this year after their landlord’s home was put on the auction block. They marked the items in the home they wanted to keep and gave the rest away.
They went so far as to the leave the doors to the home unlocked for several days, letting strangers come and go as they pleased
“People cleared out the house, they even dug up the perennials,” Crystal Lake Building Commissioner Rick Paulson said.
Concerned neighbors called the police and city officials to complain.
“I’d never seen anything like it in my life,” neighbor Dan Zurawski said. “People were going in and out of the house taking whatever they wanted.”
Although not illegal, Paulson said he wouldn’t recommend this tactic to others because it upset the neighbors.
Not to mention the possible dangers of an unsecured and virtually abandoned home.
The home has since been secured and is being listed for sale for $135,000.
Keefe estimated that 1 in 50 foreclosed homes in McHenry County is stripped out or left to rot.