The Illinois property sector remains challenged as it has been strongly affected by the national credit crunch. As an effect, home inventory has not fallen yet as more homeowners are still putting their properties up for sale. Foreclosure rates are high in each city and more borrowers are locked in paying resetting adjustable rate mortgages. It’s no wonder why they’re paying more from what they borrowed during the real estate boom.

Last November, former President George W. Bush signed an extension of unemployment insurance for seven more weeks for workers who are out of unemployment benefits and 13 weeks more for states with unemployment rates at 6 percent or higher. Illinois’ labor market has deteriorated that it was able to benefit from this legislation. As more workers are forced to accept their severance pay, more houses will be at risk of foreclosure this year. But slow home sales have already piled inventories in housing since 2007 and there is still no sign of abatement so far.

Chicago’s financial district was hammered by the crisis. No more than 30,000 jobs were cut in the Windy City as banking and insurance companies’ tarnished balance sheets cannot support the existing work force. RealtyOutlook.com forecasts home values to go down by 13.5 percent in 2009. Expect more homeowners to be off the fence in the property market.

In Peoria, resale homes are providing a temporary support to the property market. Buyers are indeed finding it easy to pay it in Peoria, as the cliché goes. But the recent lay off of workers especially from the construction firm Caterpillar Inc. proves that more headaches in the labor force are ahead this year. RealtyOutlook.com forecasts a 7 percent drop in home prices.

Buyers can opt for the bargain prices in Decatur where the old town lifestyle still persists even if it’s just a few miles away from the Chicago Real Estate market. Until such time that home sales start to pick up, Decatur will have to contend with the glut of homes in its inventory. Home values will be down by an acceptable 4 percent this year.

Springfield’s state and local government can still support the employment of majority of its residents but last December, unemployment filings reached a 26-year high. As homeowners are putting their houses in the market, home values are pressured by the rise in foreclosures and are expected to fall even more by 6.5 percent in 2009.

In McLean County, Bloomington is an isolated case in Illinois’ market. Home prices are expected to increase by 3.5 percent in 2009, a situation much different from the state’s other cities. Much is attributed to the risk aversion of leading insurer State Farm during the lending boom. Today, many borrowers are able to faithfully pay their mortgages monthly.