From press release
Even as federal tax credits expired at the end of April, the number of houses and condominiums sold by members of Rockford Area Realtors surged again in May to their highest level for the year.
In May, Realtors sold 414 properties, up nearly 33 percent from 312 sold in May 2009, and 6.4 percent higher than the month of April this year, when 389 properties were sold.
This was the fourth straight month of significant year-on-year increases, the highest monthly total of the year and the highest monthly total dating back to July 2009.
“Following the expiration of the tax credit, we expected and saw significant sales heading into the spring home-buying season,” said Steve Bois, CEO of Rockford Area Realtors. “With mortgage interest rates at record lows, affordable prices and new listings coming on the market, the growing housing market presents noteworthy opportunities for buyers and sellers.”
The three-month rolling average price climbed 1.9 percent from $113,216 in April to $115,396 in May this year. And pending home sales, a forward-looking indicator based on contracts signed in May, is higher than April, indicating a continuing strong market.
Falling interest rates seem to be fueling the current market. “Interest rates dropped from April to May, and with interest rates around 5 percent and home prices down from two years ago, this may be the single-best time in this country’s history to buy property,” Bois said. “But, interest rates are predicted to increase soon, and when rates go up, they may go up quickly and dramatically. Over the last six years, when interest rates spike, they have gone up as high as 2 percent.”
And for sellers, conditions are improving, as buyers return to the market. A recent Fannie Mae survey of Americans found two-thirds of adults (65 percent) still prefer owning a home, despite the housing downturn and challenging economic environment.
“Indicators show that housing continues to be a great long-term investment in the Rockford area,” Bois said. “Those who bought early in the boom still saw positive home equity, even through the recession.”
Bois said over the last decade (Jan. 1, 2000, to Dec. 31, 2009), Rockford real estate showed an 18.4 percent return, compared to a 5.6 percent drop in the Dow, a 20.9 percent drop in Standard & Poor’s, and a 43.9 percent fall in the NASDAQ.
According to statistics by the National Association of Realtors, Rockford housing equity fared much better than the national average over the last seven years. From 2003 to 2009, the average Rockford home gained $22,100 in equity versus a drop of $47,600 in the equity of an average U.S home.
From the June 9-15, 2010 issue