Online Staff Report
Rockford Area Realtors (RAR) hit the highest November average sales price in the last five years, yet sales were down 20 percent from October, according to new statistics released by the association Dec. 5.
It was the fifth straight month of year-over-year price increases, with the three-month rolling average price hitting $108,281, 5.6 percent over the average price of $102,506 last year. The November average price was the highest in five years, when the November average hit $116,767 in 2010.
Realtors in Boone, Ogle and Winnebago counties sold 298 homes and condos in November, down 13.6 percent from 345 sales last November. Sales were down 20 percent from 372 properties sold in October, while the normal October-to-July drop is 7.5 percent. Interestingly, the Rockford-area housing market took a similar drop in sales from October to November 2012, of 21.8 percent, the second year of the current housing recovery.
“This up-then-down sawtooth trend is very interesting,” said Steve Bois, RAR CEO. “We can’t pinpoint any specific factors that explain this market drop, and in fact, many local housing indicators are actually trending upward.”
Bois said showings are up significantly. Home showings by Realtors increased a significant 17.6 percent from 17,464 showings in August through October 2013 to 20,541 showings for the same time frame this year.
Another positive statistic was sales pending. Sales pending, an indicator of future home purchases, was down only 3.5 percent from last year, nowhere near the drop in sales actually recorded.
One explanation for the dramatic sales swing may be changing market dynamics.
Every year from 1998 to 2007, before the economic recession, Realtors could predict the seasonality of their business with slow winter sales picking up in March and April, followed by the high season of June through August, then a big drop-off thereafter.
Since the housing recovery began in 2010, sales by month have been fairly unpredictable. In 2012, October saw the most sales of any month. In 2013, October to November sales were three of the top six months. This year, August has tallied the highest number of property sales.
“These housing market dynamics continue to challenge our thinking,” Bois said. “The big takeaway for homebuyers and sellers is that the last few month’s housing numbers are really the best indicators of what to expect in the near future. Realtors and their clients need to stay tuned in to what’s currently happening, in order to make the most sense of the market and to plot the best strategies.”
Even with the dramatic drop in November sales, year-to-date sales are just 2.6 percent off last year’s sales — 3,668 for January to November 2014 compared to 3,765 for January to November 2013.
In its most recent report, the Regional Economics Applications Laboratory of the University of Illinois forecasts future housing growth with prices expected to continue to improve, total sales growing in the next three months, and a continuing drop in foreclosure housing inventory.
“One month doesn’t make the market,” Bois said. “You need to look at the economics of the region and where it’s going. We have strong economic data locally with hundreds of millions of dollars of new development invested in retail, industrial and infrastructural improvements. As a result, with more new hiring, we should see these housing numbers continue to improve.”
Posted Dec. 5, 2014