Real Estate News: Average home price hits seven-month high
The average price of a home sold by Rockford Area Realtors in September rose to $106,492, the highest average price since $111,824 in February of this year, seven months ago. The three-month average rolling price rose 2.4 percent from $103,981 in August to the September average price of $106,492.
Total property sales fell 5.7 percent from 330 sold in August to 311 in September, about half the normal drop of 10.7 percent in sales from August to September, dating back to 1998.
“A strong buyer’s market continues in the Rockford-area housing market, with record low mortgage interest rates and lower home prices,” said Steve Bois, CEO of Rockford Area Realtors. “The view that houses are not selling is totally inaccurate; we have 311 examples to prove that.”
Bois said underlying factors for improving sales are record-high affordability conditions (low interest rates and lower property prices), rising rents and investors buying real estate as a future inflation hedge.
Other September statistics by the association signal longer-term good news. The absorption rate, the time it takes to sell an average home, decreased for the third month in a row, and the total inventory of properties for sale dropped for the fourth month in a row, now at 2007 inventory levels.
“This is good news for the housing recovery,” Bois said. “Cleaning up distressed properties in the marketplace that are typically sold at deep discounts will eventually improve housing prices, which we think is indicated by this month’s rolling average price.”
Rockford-area sales to date for the first three quarters are at 2,375 properties, just 10.2 percent off 2,644 sold in the first nine months of 2010, a difference of 269 properties.
The University of Illinois REAL Forecast predicts that sales for the final three months of the year for Illinois will be significantly higher than the same period last year.
Bois predicts that if the average increase of 21 percent in sales for third quarter 2011 over 2010 holds, total area housing sales for 2011 will end up slightly below 2010 totals, somewhere in the range of a 4 to 6 percent drop. If so, this will be the smallest drop in housing sales since the housing recession began in 2007, and may signal a long-awaited upward turn in the housing recovery in 2012.
From the Oct. 12-18, 2011, issue