SPRINGFIELD (February 8, 2005) Sales of existing single-family homes amounted to 768 during the fourth quarter of 2004, reflecting a 5.7 percent decrease from the 2003 fourth quarter home sales figure of 814. In spite of a fourth quarter decline in sales 2004 marked the best year on record finishing five units ahead of 2003 with 3,660 sales.

The Capital area median existing single-family home sale price for the fourth quarter of 2004 was $95,000, reflecting a 5.7 percent increase over the prior year’s fourth quarter price of $89,900. The median price for 2004 was $94,000, reflecting a more modest growth of 2.2 percent over the 2003 price of $92,000. The median is the midpoint in the price range; half the homes sold cost more, half cost less.

Gail Chevalier Zini, CAAR's president, said an overall decline was expected in the fourth quarter. "Our sense is that November sales were the peak for the current housing cycle, but activity does remain strong," she said. "There is no sign of a marked downturn. Home sales will continue at historically high levels, and 2005 is expected to be the third-best year on record for the local housing market."

Springfield, the largest city in CAAR’s report, realized 2,162 existing single-family home sales in 2004 which mirrored the same level in 2003. Outside of Springfield the largest number of home sales in a municipality was recorded in Chatham with 267 units sold in 2004 reflecting a 4.3 percent decline over 2003. Next in line was Taylorville with 230 sales reflecting a 12.7 percent increase from 2003. The largest year over year increase in sales occurred in Virden which had 70 sales reflecting a 42.9 percent increase over 2003.
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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 2004 median sale price was $94,000, up 2.2 percent from 2003. Elsewhere, Sherman registered an 8.9 percent increase in the median sale price reflecting the most expensive community in the survey at $147,000. In the Rochester area the 2004 median home sale price of $141,000 was down 9.0 percent from 2003, while the Chatham area’s 2004 median price of $145,000 was up 5.1 percent. The Petersburg area’s 2004 median price of $106,500 reflects a modest reduction of 0.5 percent over the 2003 median price while Taylorville’s 2004 median price of $75,000 reflects a 6.4 percent increase over the 2003 median price.

According to Freddie Mac the average 30-year mortgage rate for the fourth quarter of 2004 was 5.7 percent, slightly more favorable than the prior year’s fourth quarter rate of 5.9 percent. The average 30-year rate for all of 2004 was 5.7 percent nearly unchanged from the prior year’s average rate of 5.8 percent. “The good news is that mortgage interest rates remain historically low. " Although mortgage interest rates should rise modestly over the course of the next year, they'll stay low enough to preserve favorable market conditions.” "Low interest rates are helping new buyers to enter the market. This growth in homeownership is stimulating all steps of the housing ladder by creating a ready market for existing owners wishing to make a trade, and underscores the value of housing as an investment," said Chevalier Zini.

When considering all property types reported sold through the MIS (including farm, commercial, apartment, residential, etc.) the association reported a total of 872 sales during the fourth quarter of 2004, down 5.5 percent from the prior fourth quarter. For the year in 2004 there were 4,129 sales, up 1.7 percent from 2003. Total dollar volume of all property sold in the fourth quarter of 2004 was $102.8 million reflecting a 5.0 percent increase over 2003. For 2004 the total volume of sales was $465.7 million, up 6.0 percent from 2003.

Chevalier Zini expects economic conditions in 2005 will be comparable with last year. "Our forecast for the housing market is for a continuation of strong home sales, although down a little from the record-setting pace of 2004," 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.