SPRINGFIELD (February 10, 2003) Sales of existing single-family homes increased just enough in 2002 to set a new annual record, according to the Capital Area Association of REALTORS® (CAAR) as reported through its Multiple Listing Service

There were a total of 3,229 existing home sales during 2002, up 1.8 percent from the previous record of 3,147 set in 2001. The Capital area median existing single-family home sale price for 2002 $89,900, a 4.3 percent increase over the previous year’s price of $86,200. The median is the midpoint in the price range; half the homes sold cost more, half cost less.

Barbara Krueger, CAAR’s President, said a combination of favorable market conditions has been contributing to record housing activity. "Exceptionally low mortgage interest rates are the primary factor in record levels of home sales," she said. "Interest rates are the lowest they've ever been in Freddie Mac's records, and looking at other sources we have to go back to 1965 to see similar mortgage rates."

Springfield, the largest city in CAAR’s report, realized 1,920 existing single-family home sales in 2002 up marginally over 2001. Outside of Springfield the largest number of home sales in a municipality was recorded in Chatham with 250 units sold in 2002 reflecting a 20.8 percent increase over 2001. Chatham accounted for three quarters of the increase in home sales in the entire Capital area market. The largest year over year increase in sales occurred in Virden which had 54 sales reflecting a 22.7 percent increase

The CAAR year-end price survey covers median prices for existing detached single-family homes in a number of area communities. The city of Springfield's 2002 median sale price was $87,000 up 2.4 percent from 2001. Elsewhere, in the Rochester area the 2002 median home sale price of $138,500 was up 8.4 percent from 2001, the Sherman area 2002 median price of $127,300 dipped 1.9 percent from 2001 while Chatham's 2002 median price of $128,300 was up 2.6 percent. The Petersburg area’s 2002 median price of $101,000 reflected a 5.2 percent increase over the 2001 median price while Taylorville’s 2002 median price of $70,000 reflects a 8.9 percent increase over the 2001 median price.

The average 30-year rate for all of 2002 was 6.54 percent, the lowest annual average since Freddie Mac started tracking interest rates in 1971. "Because the overall economy is expected to improve this year, mortgage interest rates should rise modestly," Krueger said. "For the near term, this means we have the most favorable housing affordability conditions that can be expected all year."

When considering all property types reported sold through the MIS (including farm, commercial, apartment, residential, etc.) the association reported a total of 3,719 sales in 2002, up 5.6 percent from 2001. Total dollar volume of all property sold in 2002 was $378.2 million reflecting a 8.3 percent increase over 2001 total volume of $349.2 million.

CAAR President Barbara Krueger said the momentum of home sales is expected to remain strong. "With favorable affordability conditions and an improving economy, home sales are projected to remain strong in 2003 and should come fairly close to record levels, but it's unlikely they'll top last year's record-smashing performance," she said.

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 real estate industry. The Capital Area’s Resource for Real Estate Information can be found at www.seehouses.com.