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Year-to-Date Home Sales Up 9.23 Percent Through June

The Brexit Impact Delivers Lower Mortgage Rates

After recording sales growth for four straight months, home sales eased slightly in the Champaign County area in June while the median home sale price posted a slight annual increase, according to the Champaign County Association of REALTORS®.

For the month of June 2016, the median home sale price (for all single-family homes and condominiums) was $150,250, an increase of .23 percent from the $149,900 June 2015 price. The year-to-date median price through June of 2016 was $144,000, a decrease of 1.36 percent from $146,000 over the prior year. The median is a typical market price where half the homes sold for more, half for less.

The number of homes sold in the Champaign County area in June 2016 was down slightly with 394 sales, off 1.99 percent from 402 reported in June 2015. The total number of homes sold year-to-date through June 2016 was 1,479, up 9.23 percent from 1,354 reported a year ago.

There were 297 pending home sales reported for the month of June, down 2.94 percent from June 2015. Pending sales for June reflect the number of active listings that went under contract and are awaiting closing, usually 30 to 60 days in the future. As of July 6th, there were 1,389 residential listings up from 1,369 on the market as of June 13th.

The city of Champaign and Savoy region reported a home sale gain of 1.62 percent to 188 sales in June compared to 185 sales in June of 2015. The city of Urbana home sales posted a 4.05 percent gain in home sale activity to 77 sales from 74 sales a year ago.

            “We should expect to see modestly lower interest rates for the near term a windfall from the recent events associated in the wake of the Brexit vote and a welcome surprise for homebuyers. Much of the decline in mortgage rates this year occurred during the first quarter of 2016—but the Brexit vote only delivered another drop in rates to the lowest they have been in more than three years,” said Stefanie Pratt, president of the Champaign County Association of REALTORS®. “The average 30-year fixed rate mortgage hit 2016 year lows last week at 3.41 percent. That is the lowest since May 2, 2013 when rates were 3.35 percent and only 10 basis points from its November 2012 all-time record low of 3.31 percent, according to Freddie Mac.”

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed rate mortgage was 3.54 percent in June, down from June 2015 rate of 3.97 percent and down from 3.60 percent reported in May 2016. The average commitment rate for all of 2015 was 3.85 percent.           

“As we hit the mid-year point for the market, there are no striking changes on the horizon that should curtail homebuying activity in the Champaign County area. Low mortgage rates and a steadily improving economy are helping to drive a strong real estate market. Homes are selling faster than a year ago with loosening inventory levels as we see an uptick in properties on the market,” said Pratt. “First-time homebuyers, millennials and baby boomers should all eye opportunities that exist right now to borrow money at these extremely low rates to include real estate as part of their assets.”

            Total dollar sales volume for residential sales for the month of June 2016 was $71,463,324 up 5.18 percent from $67,941,163 in June 2015. Year-to-date sales volume through June was $247,301,125 up 12.56 percent from $219,693,767.

Looking ahead to the second half of the year, Lawrence Yun, chief economist for the National Association of REALTORS®, says the fallout from the U.K.’s decision to leave the European Union breeds both immediate opportunity as well as potential headwinds for the U.S. housing market.

            “In the short term, volatility in the financial markets could very likely lead to even lower mortgage rates and increased demand from foreign buyers looking for a safer place to invest their cash,” Yun said.

According to the recently published 2016 Profile of International Activity in U.S. Residential Real Estate, foreign buyers purchased $102.6 billion of residential property between April 2015 and March 2016. According to Lawrence Yun, NAR chief economist, “Foreigners, especially those from China—continue to see the U.S. as a solid investment opportunity and an attractive place to visit and live.” For the fourth year in a row, buyers from China exceeded all countries by dollar volume of sales at $27.3 billion but over triple the total dollar volume of sales from Canadian buyers who ranked second at $8.9 billion.       

 “Given the uncertainty in the state’s economy and the pending national elections, the housing market continues to grow in terms of sales and prices and the short-term (3-months ahead) forecasts remain positive,” noted Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory, Institute of Government and Public Affairs, University of Illinois in his June Housing Forecast.

“It is important that both buyers and sellers work with a REALTOR® who can counsel them through all aspects of the real estate transaction,” said Pratt. “In this competitive market, a REALTOR® can help sellers price and market their home aggressively through multiple channels.”

The Champaign County Association of REALTORS® is a voluntary trade organization serving Champaign County and surrounding area and is a leading resource for 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.

Tuesday, July 12, 2016/Categories: News Releases