The West: Are Chicagoland's Far, Far 'Burbs, Far, Far from Bottom?

During 2005 and 2006 I worked with many homebuyers looking for bigger houses to go along with higher market mortgage rates. Despite the weakening of the housing market in the collar counties of Chicago, this left many buyers looking westward. These were especially good times for sellers in DeKalb, Boone, Kendall and McHenry County. After more than 10% of price decline in most of the Western Suburbs, these areas are experiencing a delay of the market correction felt in the collar counties. Accustomed to buyers who were bringing their commute west, they are now finding that buyers are drawing the line at a shorter commute, and are getting the values they want from sellers in Kane or even DuPage Counties.

Sycamore, a growing city in DeKalb County, is a textbook example of this phenomenon. Looking at Sycamore's latest data for days on the market, we see a steady increase since mid-2006. Not dissimilar to many areas, Sycamore is finding itself at the very edge of Chicago's pricing trends, meaning they are downstream of price movements in Cook, DuPage and Kane counties. Days on market is at its highest point - higher than 2007's winter, which points to a long summer, and an even colder winter in 2008. Days on market is only part of the story.

Looking at the "# of Units Sold" data shows exactly how difficult the "thinning" of inventory is going to be for Sycamore. A glut of unsold properties in the North side of town, and competition from neighboring areas like Cortland and DeKalb is proving problematic for Sycamore sellers. Add on to that a newly implemented Buyer's Transfer Stamp (tax) of .5% and you find out why Sycamore's number of units sold have not experienced a spring market pick-me-up (buyers pay $5 for every $1,000 of purchase price, increasing their closing costs). The "# of Units Sold" graphic also includes "Days On the Market" numbers above each month's bar, in blue text.


To the South of Sycamore is its twin city, DeKalb, where Northern Illinois University (NIU)resides. With Chicago's suburban sprawl beginning to have an effect on this "college town," the economic engine of higher education has a complementary force of market growth. DeKalb is also levying increased taxes for its population, reaching in many directions to keep an operating budget intact. These taxes have not been in place to be able to measure their effect, but the timing is as perilous as Sycamore's Transfer Stamp Act. Examining DeKalb's "# of Units Sold"we see that the spring market's uptick in sales has not made a substantive dent at their inventory, as Days on Market continue to grow longer.

The Wild Wild West, it seems, came to the party late. A market recover there may not be as rapid as some closer-suburban areas. Tax policies that penalize homeowners and investors may be contributing factors as we look to the future.