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Chicago area housing market in full recovery mode?

The Chicago area celebrated a strong October for home sales. In fact, the area saw more home sales than it has in any October since 2006, according to a recent story by the Chicago Tribune.

According to the Tribune story, the sales of existing single-family homes and condominiums in the nine-county Chicago area hit 8,326 properties in October. That figure is a whopping 44.1 percent higher than the 5,776 homes sold in the nine-county area in October of last year.

And, just as importantly, the October sales figures were up 11.3 percent when compared to September.

Of course, some caution is called for here. The Chicago area still has a long way to go before the residential real estate market enters full recovery mode. There are still too many foreclosure sales dragging down average sales prices, and there are still too many homeowners in the area — both in the city and the suburbs — who owe more on their mortgage loans than what their homes are worth.

But the October sales numbers are good news for local homeowners. What accounts for the impressive sales jump? Some analysts quoted in the Chicago Tribune story point to the country’s record-low interest rates. Buyers with good credit scores can qualify for interest rates under 4 percent on 30-year fixed-rate loans and under 3 percent on 15-year fixed-rate loans. This makes it cheaper to borrow mortgage money and, therefore, easier to afford a home today.

At the same time, many home buyers believe that home prices in Chicago and its suburbs have stabilized, according to experts quoted by the Tribune. They see no more reason to wait for home prices to drop even further.

Again, it’s easy to get overly excited about these sales figures. The signs are good that the Chicago area’s housing market is improving. Just don’t be surprised if sales and/or median sales prices do experience a few more drops in the near future.

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