Rockford-area home sales were up an impressive 22 percent from 173 homes sold in February to 211 properties sold in March 2011. However, compared to a year ago when the federal tax credit was in effect (offering up to $8,000 for each first-time homebuyer), sales are down 32.6 percent from 313 homes sold in March 2010.
Sales for the first quarter of this year were 544 homes and condos, down 20 percent from 681 properties sold in first quarter 2010. The three-month rolling average sales price hit $103,856 in March of this year, down 7.1 percent from the average price of $111,824 in February, and 10 percent lower than the average price of $115,416 last March.
“This is not an extremely negative signal for the area housing market because sales were forecast to decline year-over-year for the first three months,” said Steve Bois, CEO of Rockford Area Realtors. “The early 2010 housing market was inflated with the homebuyer tax credit by an estimated 16.5 percent, according to the Regional Economics Applications Laboratory (REAL) of the University of Illinois.”
Bois said the state agency is predicting month-to-month increases for the next three months; however, the forecasts are calling for lower increases than last year during the same period, stifled by the same lingering effects from the 2010 federal tax credit.
An encouraging factor for the housing market is the news that the national unemployment rate hit a two-year low of 8.8 percent in March, capping the strongest two months of hiring since before the recession.
In the Rockford MSA, which includes Winnebago and Boone counties, the unemployment rate was down more than 4 points from 17.8 percent in February 2010 to 13.6 percent this past February.
“The new economic stats just released indicate not only continued recovery, but the pace of the recovery may be increasing,” Bois said. “As a result, Rockford Area Realtors reported increased open house and other buyer activity in March.
“The housing market will start seeing signs of recovery,” Bois added. “However, the real issue facing the nation right now is jobs. Americans need to find meaningful work to support their families, and housing is essential to creating jobs.”
Owning a home contributes to the strength of the nation’s economy, Bois said, and housing creates jobs. Housing accounts for 15 percent of the national Gross Domestic Product, or $2 trillion, a key driver in the national economy, according to the National Association of Realtors. With every two homes sold, one job is created. With 544 homes sold in the Rockford area during the first quarter, an estimated 272 jobs were created.
Bois said more encouraging job signals and warmer weather should bring qualified buyers “out from hibernation to grab hold of the still low interest rates and high affordability in place for the spring market, the start of the traditional home-buying season.”
From the April 13-19, 2011 issue