SPRINGFIELD (October 25, 2004) Strong housing market fundamentals propelled total existing-home sales to the highest pace on record in the third quarter, according to the Capital Area Association of Realtors® (CAAR). Figures released today by CAAR reveal that 1,085 existing single-family home sales were recorded during the third quarter of 2004, dead-even with the record-setting sales pace of the 2003 third quarter.

CAAR President Gail Chevalier-Zini said that the favorable market conditions that are responsible for the strong third quarter sales are expected to continue. “Mortgage interest rates have come back down to the 5.75 percent range over the last few weeks. Although mortgage rates are expected to trend gradually upward, they are expected to remain historically low. What won't change is the demographic demand from more people entering the years in which they typically buy a first home, which is freeing existing owners to make another purchase and keep home sales at a higher level than we saw in the beginning of this decade,” said Chevalier-Zini.

Chevalier-Zini said that historically low mortgage rates will preserve favorable housing affordability conditions and help to keep home sales historically strong in the months ahead. According to Chevalier-Zini, mortgage interest rates are only part of the picture. "The fundamental demand from entry level buyers, dominated by the second-largest generation in U.S. history , the children of the baby boom, will drive home sales over the next ten years because this generation is entering the prime years in which people typically buy their first home, said Chevalier-Zini.

The Capital area median existing single-family home sale price for the third quarter of 2004 was $97,800, nearly 5.2 percent above the previous year's third quarter median price of $93,000. The median is the midpoint in the price range; half the homes sold cost more, half cost less. Total dollar volume of all single-family homes sold during the third quarter of 2004 was also nearly even with the $122.6 million sold during the same period of last year.

Chevalier-Zini points out that Springfield remains very affordable as compared to the rest of the nation. According to Chevalier-Zini, the national median existing-home price was $170,000 in 2003 as compared to $92,300 in the Springfield area.

Third quarter 2004 sales of all property classes combined (i.e., commercial, industrial, farm, residential, vacant land) reveal sales of 1,185, reflecting an increase of 1.4 percent from the 1,169 sales reported during the same period of 2003. Total dollar volume of all real estate sold during the third quarter of 2004 was $134.3 million revealing an increase of 1.8 percent from the $131.9 million sold during the same period last year.

The Federal Home Loan Mortgage Corp. reported that the national average commitment rate for 30-year, conventional, fixed-rate mortgages was 5.9 percent during the third quarter of 2004, nearly unchanged from the 6.0 percent rate for the same period of 2003.
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.

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