SPRINGFIELD (January 29, 2004) Sales of existing single-family homes set 2003 fourth quarter record while 2003 year end sales set an annual record, according to the Capital Area Association of REALTORS ® (CAAR).

A total of 3,642 existing single-family home sales occurred during 2003, up 12.5 percent from the previous record of 3,236 set just one year before in 2002. Existing-home sales during the fourth quarter of 2003 marked the strongest fourth quarter sales pace on record with 806 units sold. This represents an increase of 3.5 percent over the 779 units sold during the fourth quarter of 2002.

CAAR President, Rick Hanselman, said 2003 will most likely be the high-water mark for the housing market in the Capital area. "A record number of Capital area families achieved the dream of homeownership last year. With each of the four quarters and ten of the twelve months setting records for existing-home sales it will be hard to top 2003."

The Federal Home Loan Mortgage Corp. reported that the national average commitment rate for 30-year, conventional, fixed-rate mortgages was 5.92 percent during the fourth quarter of 2003, down from the already low 6.07 percent rate at this time in 2002. Hanselman said low interest rates also will predominate in 2004.

"With very low inflation, we expect fixed mortgage interest rates to increase only modestly –– about half of a percentage point over the next year ––which will maintain favorable housing affordability conditions throughout the year," he said. "This is good news for first-time buyers who may need a little more time to save for a downpayment and closing costs."

The median price for 2003 was $92,000, up 2.3 percent from the previous year's price of $89,900. The Capital area median existing single-family home sale price for the fourth quarter of 2003 was $89,000, reflecting a marginal decrease from the previous year's fourth quarter median price of $89,500. Hanselman says he doesn't expect much change in the rate of price increase during 2004. The median is the midpoint in the price range; half the homes sold cost more, half cost less. "Price appreciation will continue to rise but only modestly as it slightly outpaces the general rate of inflation."

"Clearly, the historic lows we've seen in mortgage interest rates this year are the biggest factor in record home sales, but the growing number of households entering the prime years for buying a first home will be driving the housing market for years to come," said Hanselman

Fourth quarter 2003 sales of all property classes combined (i.e., commercial, industrial, farm, residential, vacant land) reveal sales of 920 during the fourth quarter of 2003, down marginally from the 924 sales reported during the same period of 2002. Total dollar volume of all real estate sold increased 1.9 percent with $97.7 million sold during the fourth quarter of 2003 as compared to $95.9 million during the same period in 2002. Total dollar volume for all property classes in 2003 was 439.3 million, up 16.1% over the 2002. Total unit sales for all property classes in 2003 was 4,054, up 9.0 percent over 2002.

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.

Note: On February 9 th at 10:00 a.m. the Capital Area Association of REALTORS will release its comprehensive home sales report for 2003 which lists unit sales and median sale prices by individual community.