Crisis over? Metro-east area Realtors are hoping for a recovery

Local homes sales are rising and foreclosures are falling.

So ... is the metro-east housing market making a comeback?

"I'm very hesitant in saying we've turned the corner," said Dan Tatum, president of the Realtor Association of Southwestern Illinois. "But I'm certainly very optimistic."

This optimism comes as foreclosures filed in St. Clair County fell for the third consecutive month in May. The 26 filed last month is lower than the 39 reported in April and well below the 163 recorded in March.

In Madison County, foreclosure filings dropped to 41 in May from 51 in April and 145 in March, a sharp and continuous decline after the 130 recorded in February and 153 in January.

Two weeks ago, the Belleville-based Realtor Association of Southwestern Illinois reported 192 homes sales in April, up from the 168 recorded in March. May sales numbers are scheduled to be released later this month.

The association's counterpart, the Greater Gateway Association of Realtors in Glen Carbon, reported 225 sales in April -- 58 more than the previous month.

"In my talking to Realtors in the community, and I've talked with some in the Greater Gateway area as well, who are looking at their geographic area in the Edwardsville area, we're seeing overall there seems to be a lot more optimism by Realtors versus a couple months ago. We're all very hopeful in that respect."

A spokeswoman for the Illinois Association of Realtors in Springfield said more than half of the current homebuyers are first-timers who are taking advantage of the low interest rates, lenders who have placed a brief moratorium on foreclosures and $8,000 in tax credits that are being offered to stimulate the economy.

"We're hearing a lot of results and seeing first-time buyers coming because of tax credits being offered for those buyers specifically," spokeswoman Mary Schaeffer said. "You're going to see a surge of activity."

But the tax credit is available only until Dec. 1 for first-time homebuyers who can file for the credit next year, when they file their taxes. In O'Fallon, Gershman Mortgage Vice President Deborah Carpenter said she has noticed a good volume of pre-approved applications coming through their offices.

"I do think that the $8,000 for first-time homeowners' tax credit is helping the first-time homeowner," Carpenter said. "It is really helping the younger generation. We have definitely seen it, even in the last week, we've seen a huge increase. It's very positive."

Statewide, homes sales jumped by 9 percent between March and April. The state association also reported that sales were still down by more than 20 percent in April compared to April 2008.

Interest rates also continue to fall. According to the Federal Home Loan Mortgage Corp., the monthly average rate for a 30-year fixed-rate mortgage was 4.85 percent in April, down 0.3 percent from the 5.15 average rate recorded in March. In April 2008, that rate was 5.94 percent.

Home sales in the state set a string of records between 2003 and 2005 before the market declined in 2006 and further plummeted, mainly due to subprime mortgages, which led to mass foreclosures and ultimately spurred the economy's nose dive.

First quarter homes sales recorded across the state totaled 16,000, but still are lower than last year, when 21,000 were reported.

At its peak, a record 183,000 homes were sold in the Land of Lincoln in 2005. Sales fell to 168,000 in 2006 and 140,000 in 2007. Last year, 107,000 homes were sold in the state.

"It may not return to robust levels where it was in 2005," Schaeffer said, "but we're slowly making a comeback."

"It's great for first-time homebuyers," Carpenter said. "They should definitely take advantage of this. Rates are good, and it's a good time to buy."