Rockford Area Realtors: Sales down 3.8 percent in 2011, lowest decrease since start of housing recession
Online Staff Report
Rockford Area Realtors (RAR) sold 3,213 homes and condos in 2011, 3.8 percent lower than the 3,341 properties sold in 2010 in Winnebago, Boone and Ogle counties. This marks the smallest year-over-year decrease since the housing recession began in 2007, signaling what many housing economists expect is the beginning of a gradual housing recovery in 2012.
RAR reported December 2011 sales of 255 properties, an 11.4 percent increase above 229 sales in 2010. This was the seventh-straight month of year-over-year increases. The last significant run of year-over-year increases dates back to January 2006, a similar string of seven monthly year-over-year increases.
“The headwinds are strong heading into 2012,” said Steve Bois, CEO of RAR. “There are indications the economy and the housing market are slowly gaining ground.”
While home sales have been robust over the last seven months, a mix of positive and negative December sales statistics point to a still struggling housing recovery, mirroring the national economy.
The three-month average rolling price hit $98,076, the lowest monthly average dating back to April 1998, with a large number of foreclosures still taking their toll on the current average sales price.
Positive markers show a decreasing absorption rate, the average time it takes to sell a home, the seventh-straight monthly drop. And the monthly inventory of homes for sale dropped 6.4 percent from 2,800 properties in November to 2,621 properties for sale in December of this year. This is the lowest monthly inventory level since June 2006, when 2,609 properties were available on the market.
What does 2012 hold for the Rockford area housing market?
“Mortgage rates are expected to hold at near record lows through the middle of the year,” Bois said. “Housing affordability conditions, based on the relationship between mortgage interest rate, average home prices and family income, has been at a record high this year. And we’ll most likely record the second-best housing affordability year since 1970.”
He added, “We anticipate that home sales will steadily increase, but will not be robust. And with falling inventory, the average home price should rise in 2012 — there likely will be moderate appreciation in the coming year.”
Bois said consumer confidence has been shaky recently and the uneven economic recovery has been holding back a significant number of homebuyers all year.
“Nonetheless, there is a sizeable pent-up demand based on population growth, employment levels, local economic gains in the manufacturing industry and a doubling-up phenomenon that can’t continue indefinitely,” he said. “This demand could quickly stimulate the market when conditions improve.”
Following are RAR’s full-year housing statistics for 2005-2011:
2011 — 3,213 total sales, a 3.8 percent decrease
2010 — 3,341 total sales, an 8.3 percent decrease
2009 — 3,642 total sales, an 8.4 percent decrease
2008 — 3,978 total sales, a 31.9 percent decrease
2007 — 5,844 total sales, an 18.7 percent decrease
2006 — 7,192 total sales, a 0.5 percent increase
2005 — 7,151 total sales