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Champaign County Area Home Sales Slip in February

Gains Reported in Median and Average Home Sale Price

Harsh winter temperatures and the sting of rising interest rates combined to slow the pace of home sale buyer activity in much of the Champaign County area in February of 2018. Despite slower sales, gains were reported in both the median home sale and average home sale price. There were hot spots in the market—in the City of Champaign/Savoy region sales were up 22.6 percent to 65 sales versus 52 one year ago.

          CCAR reports a total of 127 residential homes were sold in February of 2018 down 16.99 percent from 153 sales in February of 2017. There were 198 pending sales reported in February the same amount as February 2017.

The median home sale price for February of 2018 for the Champaign County area was $151,500 up 9.78 percent from $138,000 reported in February of 2017. The median is a typical market price where half the homes sold for more, half for less.

          The average home sale price stood at: $172,431 up 9.31 percent from $157,749 in February of 2017.

          “We definitely saw an up-tick in home sale activity in the below $200,000 market price range. Home sales stumbled across other areas of the state in February as it did in pockets of the Champaign County area most likely due to lower supply levels and the sudden increase in interest rates,” said Max McComb, president of the Champaign County Association of REALTORS®. “Rising home prices and steadily increasing interest rates will push the average monthly mortgage payment up for homebuyers, further challenging the market this spring. We may see buyers choosing between higher payments or lower-priced homes. Successful buyers will need to move quickly in this competitive spring market in making an attractive offer to sellers.”

          “The economy is in great shape, most local job markets are very strong and incomes are slowly rising,” said Lawrence Yun, NAR chief economist in the January pending home sales report issued 2/28/2018. “The lower end of the market continues to feel the brunt of these supply and affordability impediments. With the cost of buying a home getting more expensive and not enough inventory, some prospective buyers are either waiting until listings increase come spring or now having to delay their search entirely to save up for a larger down payment.”

In 2018, Yun forecasts for existing-home sales to be around 5.50 million—roughly unchanged from 2017 (5.51 million). The national median existing-home price this year is expected to increase around 2.7 percent.

          The average rate on a 30-year fixed rate mortgage for the month of February according to the Federal Home Loan Mortgage Corporation (Freddie Mac) was 4.33 percent, up from 4.17 percent in February 2017 and up from 4.03 in January of 2018. The 30-year fixed-rate mortgage averaged 4.44 percent for the week ending March 15, dropping for the first time in 2018 after nine consecutive weeks of gains in rates.

          “Higher prices often indicate higher demand leading to competitive bidding,” indicates McComb. “Our market is definitely poised and ready for an increase in supply, so we are hopeful sellers are preparing their homes to place on the market as there is a ready and willing buyer base seeking new inventory. As always it is important that sellers work with a REALTOR® to help with market analysis and pricing strategy in this competitive marketplace. We would like to see the funnel of new listings continuing to remain full to keep pace with the interest of new buyers coming into the market.”

          New research from the National Association of REALTORS® shows that millennials make up more than one-third of the U.S. housing market. Of that, 65 percent are first-time buyers, according to the NAR Home Buyers and Sellers Generational Trends Report. Gen Xers ranked second at 26 percent, followed by Baby Boomers with 32 percent and the Silent Generation with 6 percent of all home sales.

         “In combination with shrinking inventory and concerns about affordability at the lower end of the price scale, year-over-year sales numbers are forecast to be lower than in 2017,” states Geoffrey J. D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois in his March Housing Price Forecast for the Illinois REALTORS®. Statewide sales forecast for March, April and May suggests decreases on a yearly basis and increases on a monthly basis for both Illinois and the Chicago PMSA

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 March 14, 2018.

Thursday, March 22, 2018/Categories: News Releases