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Champaign County Area Home Sales Report Best Year in Ten Years

What's Ahead for Housing in 2017

 

The Champaign County Association of REALTORS® reports home sales activity for 2016 was up 8.23 percent over home sales in 2015, with area home sales reaching the highest annual pace in a decade. Year-end 2016 total home sales of 3,011 units were reported up 8.23 percent from 2,782 in 2015. This was the highest on record since 2006 when 3,074 home sales were reported. Fewer buyers purchased a home in December as sales softened. CCAR reports there were 216 home sales reported in December, a decrease of 8.08 percent from 235 home sales in the month of December 2015.

The median home sale price for 2016 for the Champaign County area stood at $146,000 up .68 percent from $145,000. According to CCAR, the median home sale price for December 2016 increased 9.96 percent to $148,450 from $135,000 in December of 2015. The median is a typical market price where half the homes sold for more, half for less.

            “Champaign County annual home sales rose to their highest level since 2006,” said Jim Waller, president of the Champaign County Association of REALTORS®. “This was a great year for the area real estate market driven in large part to the expansion of the Champaign-Urbana area economy and the numbers of buyers who were in a good position and eager to make their move to close on a home.  With the appealing array of community and cultural amenities our area offers including expanding healthcare facilities, there are many baby boomers making their choice to retire to our community. As individuals develop their own checklist of lifestyle needs, the Champaign County area is an attractive and affordable retirement location. Baby boomers are expected to make up nearly one-third of all buyers in 2017.”      

The total volume of sales in Champaign County for 2016 was $513,658,672 up 11.12 percent from $462,226,324 from 2015. Total volume of sales for December 2016 was $36,242,302 off slightly 0.30 percent from $36,354,819.  The number of new home sales rose in 2016 to 181 from 154 in 2015.

“In order to keep pace with ongoing buyer demand, we need more inventory (homes for sale) in a cross-sector of price ranges. That has to become reality not only this winter, but in order to be ready for the spring market when we typically see an uptick in buyer traffic,” said Waller.

Dr. Lawrence Yun, Chief Economist for the National Association of REALTORS® is hopeful that the continued job growth, any economic stimulus from the new administration and more millennials reaching their prime homebuying years will keep housing demand for the most part on solid footing. Yun forecasts existing home sales to remain in check with demand from interested buyers. In 2017, sales are forecast to grow roughly 2 percent to around 5.52 million nationally. The national median existing home price is expected to rise to around 4 percent in 2017. By the end of next year, mortgage rates are expected to reach around 4.6 percent and the Federal Reserve is expected to raise the Fed funds rate a few more times, he anticipates.

            According Dr. Geoffrey Hewings, Director of the Regional Economics Applications Laboratory at the University of Illinois, statewide median prices are forecast to continuously grow in 2017 within a narrower and slightly smaller range compared with 2016.

By December of 2017, Dr. Hewings expects the median price of homes to be $183,914 in Illinois, up 4.6 percent on an annual basis. As for statewide sales, they are forecast to experience overall positive gains in 2017. The annual growth in monthly sales statewide is forecast to be in the range from -1.4% to 8.7% for Illinois, relatively flat growth in the first six months and positive gains in the second six months. See Dr. Hewings 2017 annual housing forecast.

CCAR indicates there were 155 pending home sales reported for the month of December reflecting a decrease of 10.91 percent from 174 pending sales reported during the same period a year ago. Pending sales for the month of December reflect the total number of active listings that went under contract and are awaiting closing, usually 30 to 60 days in the future.

            The average rate on a 30-year fixed-rate mortgage for the month of December according to the Federal Home Loan Mortgage Corporation (Freddie Mac) was 4.22 percent in December 2016 up from 3.85 percent reported in December 2015 and up from 3.77 percent reported in November of 2016. Last week Freddie Mac reported the 30-year fixed rate mortgage dropped to 4.12 percent.

            “There is positive optimism about the housing market in 2017. While rising mortgage rates definitely impact buyer affordability, income growth is expanding which may hopefully lessen the sting of a higher mortgage payment,” said Waller. “We may likely see a segment of buyers electing to act sooner to purchase early in the year rather than later to avoid the impact of rising rates on their overall affordability. Watching and waiting and you may find higher mortgage rates and home prices and see your buying power deteriorate.”

Rising interest rates do have an impact on buyer affordability. Below is a calculation from the National Association of REALTORS® based on a home value of $162,858 based on a 30-year fixed rate mortgage.

The Champaign County Association of REALTORS® is a voluntary trade organization involving Champaign County and surrounding area and is a leading resource for its 475 REALTOR® members and an advocate for homeownership and private property rights. Statistics were compiled from local regions of the Champaign County Association of REALTORS® Multiple Listing Service, which covers Champaign County and surrounding areas. Go to www.illinihomes.com to preview upcoming open houses scheduled.

Tuesday, January 17, 2017/Categories: News Releases