Residential home sale activity in the Champaign County area rose by double digits during the month of December as more buyers were confident that now is the time to make a home purchase.
The Champaign County Association of REALTORS® reports a total of 211 residential homes were sold in December, up 19.89 percent as compared to 176 sales in December of 2018. For the month of December of 2019, the median home sale price stood at $166,000 up 14.68 percent from $144,750 from December a year ago. The average home sale price for the month of December was $192,522 up 13.99 percent from December 2018 home sale price of $168,901.
There were 2,752 homes sold in 2019, off by 5.23 percent as compared to 2,904 homes sold in 2018. According to CCAR, the median home sale price for 2019 was $156,250, up 3.82 percent from $150,500. The average home sale price for 2019 for the Champaign County area stood at $178,652, up 1.99 percent from $175,171 in 2018.
“While buyer demand was up sharply in December, sellers also are recognizing now is a good time to work with a REALTOR® to list their home on the market as new listings are showing positive gains. All combined, December brought a strong finish to the year for home sales in the Champaign County area.
“Median prices have maintained positive annual growth while sales throughout the year followed an unusually choppy trend before finishing the year with sales gains up near 20 percent for December. The year of 2019 was one of declining interest rates,” said Julie Roth, president of the Champaign County Association of REALTORS®.
“With low mortgage rates, low unemployment and continued wage growth, home buyer activity is expected to remain healthy into the new year.”
The average rate on a 30-year fixed-rate mortgage, according to the Federal Home Loan Mortgage Corporation (Freddie Mac) was 3.72 in December versus 4.64 percent in December of 2018 and up from 3.69 percent in November of 2019. The average commitment rate across all of 2019 was 3.94 percent. The 30-year fixed-rate mortgage for the week ending January 23rd dropped to the lowest level in three months to 3.60 percent.
“While the overall outlook for the housing market remains promising in 2020, the biggest hurdle remains increasing housing supply levels to meet ongoing buyer demand. Tighter inventory levels lead to higher home prices and that can mean a struggle for those especially at the lower end of the market,”said Roth.
“New construction was on the rise in 2019 and is expected to continue into 2020 and that should help to increase inventory levels.”
“Mortgage rates are expected to settle below 4-percent for 30-year fixed-rate mortgage in 2020 which should help buyers from an affordability and purchasing power. From a seller’s standpoint, there are several advantages to putting their home on the market as buyers remain motivated in this winter market as December sales demonstrated.”
The inventory of homes for sale declined 6.6 percent in December to 731 listings from 783 listings in December of 2018. While inventory declined, the number of new listings were on the rise up 15.5 percent to 112 new listings in December this year.
Pending sales, a sign of future real estate activity, declined 4.5 percent in December of 2019 from December a year ago. Pending sales for the month of December reflect the total number of active listings that went under contract and are awaiting a closing usually 30 to 60 days in the future.
According to Geoffrey J. D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois in the 2020 Housing Price Forecast for Illinois REALTORS®, median prices are forecast to continuously grow in 2020 within a higher and slightly broader range compared with 2019. As for sales, he forecasts overall negative gains in 2020 for Illinois and positive gains for the Chicago area.
“The mixed signals from the market are reflected in a housing market that remains positive in terms of prices but with considerable variance in terms of sales,” noted Hewings.
“Affordability and limited inventory dampen demand while low-interest rates make ownership attractive; the net effect of these forces is reflected is a market that is difficult to forecast.”
On a full-year basis, the National Association of REALTORS® reports total existing-home sales ended at 5.34 million, the same level as in 2018, as sales in the South region (+2.2%) offset declines in the West (-1.8%) and Midwest (-1.6%), as the Northeast remained unchanged.
Realtor.com reports inventory will struggle to grow in 2020 and could instead reach a historic low level. For the first time ever, Millennials (born between 1981-1997) share of mortgage originations will surpass 50 percent in the spring, outnumbering Gen X and Baby Boomers combined. First-time buyers will continue to struggle with affordability, even with mortgage rates in an approachable range, as entry-level inventory is expected to remain constrained.
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 the Champaign County area. Data compiled by Midwest Real Estate Data, LLC as available on January 14, 2020.
