In August, for the 15th month in a row, Evanston property sales dropped compared to the previous year – a downturn that could affect not only sellers but also a city budget plagued by debt.
Ninety-five properties sold in August 2008, City Clerk Rodney Green said. That’s a 38 percent drop from August 2007, when 154 transactions took place.
“This is by far the worst market we’ve had in a long time,” said Linda Hoffman, a Realtor Associate at Century 21 who deals in Evanston. “We’ve seen bad markets, but it’s never lasted this long.”
Sales in July dropped from 174 in 2007 to 116 this year. June sales fell from 167 to 111.
Donna Spicuzza, housing planner at Evanston’s planning division, said sales are down for a number of reasons.
“The decrease in sales is the result of the decisions of buyers and sellers, a result of the economy, a decline in the housing values and housing sales regionally,” she said.
The slow market is not exclusive to Evanston. Nearby areas are experiencing the same thing.
“I focus mainly on Evanston, but what I hear from other agents is that it’s similar as well,” Hoffman said.
Hoffman added that current market conditions favor buyers rather than sellers.
“If (people) are going to sell their house, they are going to take a hit on their sale,” she said. “But while they are taking a hit when they sell it, they will have a value when they purchase.”
Falling real estate sales will also decrease Evanston’s funds, since declining property sales means less revenue from property taxes.
The city’s tax code mandates that property sellers must pay $5 for every $1,000 they make on a sale and pay a $100 fee on properties with tax exemptions.
Revenue from the tax goes into the city’s budget, which is already on shaky ground . Evanston’s pension fund currently faces a projected $140 million shortfall.
“For the budget, you project the kind of revenue that you might get from different sources,” said Ald. Lionel Jean-Baptiste (2nd). “(Declining property sales) will impact it. It’s less than projected. It’s going to be a shortfall.”
The city will have to adjust to declining revenue from property sales.
“We’ll have to see other sources of revenue to make up for the shortfall. We’ll have to make sure that we find a way that the budget is balanced,” Jean-Baptiste said. “But sometimes, when you get to the end of the year, to levy your taxes, the money you project will be less, and so we are hoping that if we (have) some cushion, that will be able to absorb the loss of revenue.”
But Hoffman said she is optimistic about the future of the market.
“By now, with the sudden drop in interest rates, we’ve seen an increase in activity,” she said. “We’ll see an increase in activity through October.”
