SPRINGFIELD (April 24, 2007) The median sale price of an existing home reflected an all-time first quarter record at $93,900, according to the Capital Area Association of REALTORS® (CAAR).

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – equaled 819 units during the first quarter of 2007. With an impressive 819 homes sold the first quarter 2007 sales reflect the second highest first quarter on record. However, home sales were off 8.1 percent from the first quarter 2006 record pace of 891 sales.

Peter Steward, ABR, CRS, GRI, CAAR’s president, said the brutal weather in February largely contributed to a dip in March home sales which led to a decline in first quarter 2007 sales. “February was the coldest since 1979 and the third coldest on record. Clearly, the weather in February neutralized an otherwise pretty good start to the new year,” said Steward.

The first quarter 2007 median home sale price of $93,900 reflected a 1.5 percent increase over the first quarter 2006 price of $92,500 reaching an all-time high in comparison to previous first quarters. Total home sales volume for the first quarter of 2007 reached $92.6 million reflecting a 7.4 percent decrease from the previous year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.2 percent during the first quarter of this year, essentially unchanged from the 6.2 percent rate in the first quarter of 2006.

Although current inventory levels and attractive mortgage rates have kept home prices at affordable levels, Governor Blagojevich’s proposed Gross Receipts Tax would have a very sobering effect on the cost of constructing a new home, said Steward. A study released by the Illinois Association of REALTORS (IAR) shows that the accumulated or “pyramid” effect of the Gross Receipts Tax would add 2.84 percent to the cost of a new home. This means that in the Capital Are consumers would pay an additional $5,813 for a new home based on the 2006 average new home price of $204,700. For many people this would serve as a barrier to achieving the American dream of homeownership, said Steward.

There are currently 1,678 homes available for sale which reflects an increase over last year’s robust inventory level of approximately 2 percent. This reflects a 4.9 month supply of inventory at the current sales pace. “Toward the later part of 2006 we had began to eat into our high inventory levels, however, in recent months inventory has begun to rise again,” said Steward. “The current inventory of homes on the market continue to provide buyers with a multitude of choices. With strong sale pending numbers and an upward trend in pricing we are seeing signs of a recovering market in 2007,” said Steward.

Steward said that most buyers in today’s market are well-informed and have agents that represent their interests, so sellers need good advice on how to show and market their homes in the current environment, as well as negotiation skills –– critical values that real estate agents bring to the table.

The Capital Area Association of REALTORS® is the Voice for Real Estate in the Capital Area representing more than 700 members involved in all aspects of the residential and commercial real estate industry. The Capital Area’s Resource for Real Estate Information can be found at www.SeeHouses.com.

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