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Despite a Slight Decrease in Home Sales Activity in Champaign County in 2017

Average and Median Sale Prices See Gains

 Despite a slight decrease in home sales activity in the Champaign County area, 2017 was one of the best years on record in the past decade and home prices continued to increase moderately. Year-end 2017 total home sales of 2,882 for the Champaign County region slipped by 4.79 percent from 3,027 in 2016.

The median home sale price for 2017 for the Champaign County area stood at $150,000, was up 3.45 percent from $145,000 in 2016.  December 2017 home sales were down 9.5 percent to 200 sales from 221 sales in December of 2016, while the median home sale price for December 2017 decreased slightly by 0.24 percent to $145,650 from $146,000 in December of 2016.  The median is a typical market price where half the homes sold for more, half for less.

          The average home sale price for 2017 for the Champaign County area was $174,420 up 2.47 percent from $170,217 from 2016.

          “Positive growth in consumer confidence, labor and stock market are setting the stage for a steady housing market in 2018,” said Max McComb, CDPE, GRI president of the Champaign County Association of REALTORS®. “The 2017 sales pace for the CCAR region was just a bit under 2016 which puts us at the second best year in the past decade for home sales activity. The region is experiencing a slow but steady recovery as a result of the settlement of the state budget impasse that cast a shadow of economic uncertainty over the Champaign-Urbana area and funding issues as relates to higher education.”

          City of Urbana home sales were up 0.41 percent to 495 sales in 2017 versus 491 sales in 2016.  Champaign and Savoy region sales decreased 6.19 percent in 2017 to 1,303 sales as compared to 1,389 one year ago. The west region including Mahomet saw home sales rise 3.28 percent to 504 sales as compared to 488 sales in 2016.

 “The strengthening economy, and expectation that more millennials will want to buy, serve as promising signs for solid homebuying demand, while also putting additional pressure on inventory levels and affordability,” said Lawrence Yun, Chief Economist for the National association of REALTORS®.

Median prices are forecast to continuously grow in 2018 within a narrower and slightly smaller range compared with 2017, indicates Geoffrey J. D. Hewings, Director of the Regional Economics Applications Laboratory (REAL) at the University of Illinois in his 2018 Housing Price Forecast for Illinois REALTORS®.  On a year-over-year basis, these gains should range from 0.7 percent to 4.4 percent for Illinois and 1.8 percent to 5.6 percent for the Chicago PMSA. Hewings forecast predicts sales statewide should experience overall positive gains in 2018.

 “Illinois’ employment recovery has slowed perceptibly over the last 12 months,” noted Hewings. “There is no doubt that the lingering effect of the state budget impasse, the declining inventory together with the anemic employment growth rate all contributed to dampening the housing market.  Uncertainty about the impact of mortgage interest and state and local tax deductibility may reduce the attraction of house purchases among first-time buyers in 2018.”

At the Illinois REALTORS Public Policy Meetings on January 17 in East Peoria, Hewings also shared that Illinois job growth lags behind the U.S. and other Midwest states. Illinois added only 25,900 jobs in the last 12 months, far behind the 83,000 jobs needed to grow at the rate of its share of the gross domestic product. Outmigration in the state is also an issue as more than 33,000 people left Illinois just last year. When immigration doesn’t replace those losses, it impacts the housing market, Hewings indicated.

The average rate on a 30-year fixed rate mortgage according to the Federal Home Loan Mortgage Corporation (Freddie Mac) was 3.95 percent in December of 2017 down from 4.22 percent in December 2016 and up from 3.91 percent in November of 2017. For the week ending January 25, the average monthly fixed rate mortgage rate for a 30-year mortgage was 4.15 percent.

“Commercial real estate activity is expected to strengthen regionally and with an expanding economy that benefits all segments of the commercial market crossing into residential,” said McComb.

The time it took to sell a home in the Champaign County area in 2017 averaged 74 days compared to 80 days in 2016.

“Good news for buyers is we should see increased inventory headed into spring although recovery in the starter home market likely may take a bit longer as millennials continue to dominate that lower price market share. Prospective buyers can expect to see an uptick in mortgage rates and moderate price gains in 2018.  Buyers may not benefit from higher prices, but sellers do and there should be more listing activity by more confident sellers in 2018,” said McComb. “This is an opportune time for sellers to prepare their home for sale as inventory remains tight in certain price ranges.”

The Champaign County Association of REALTORS® is a voluntary trade organization serving Champaign County and surrounding areas and is the leading resource for REALTOR® members and an advocate for homeownership and private property rights. Statistics are from residential sales within Champaign County. Data compiled by Midwest Real Estate Data, LLC as available on January 15, 2018.

Friday, January 26, 2018/Categories: News Releases