SPRINGFIELD (February 9, 2006) Sales of existing-homes – including single-family, townhomes, condominiums and coops – amounted to 929 during the fourth quarter of 2005, reflecting a 8.9 percent increase over the 2004 fourth quarter home sales figure of 854. This strong fourth quarter boost assured that 2005 would finish with a record number of sales finishing 4 percent ahead of 2004 with 4,164 sales.

The Capital area median existing single-family home sale price for the fourth quarter of 2005 was $98,500, reflecting a 4.5 percent increase over the prior year’s fourth quarter price of $94,300. The median price for 2005 was $100,000, reflecting an impressive increase of 7.6 percent over the 2004 price of $92,900. This also marked the first time that the median price for a year hit the $100,000 mark. The median is the midpoint in the price range; half the homes sold cost more, half cost less.

Total dollar volume of CAAR home sales nearly reach half a billion dollars in 2005 with sales of $496.8 million. This reflects an increase of 11.4 percent over 2004 sales volume of $445.8 million.

CAAR President Cheryl Dambacher, said current trends in the housing sector are healthy. “We are surely pleased to see another record in 2005. However, we don’t need to break a record every year for the housing market to be good – in fact, cooling sales are necessary for the long-term health of this vital sector,” Dambacher said.

Springfield, the largest city in CAAR’s report, realized 2,198 existing single-family home sales in 2005 which reflects a 1.7 percent increase over 2004 sales.

Jacksonville, a newcomer to this survey, recorded the next highest number of home sales with 362 sold in 2005 reflecting a 34.6 percent increase over 2004. Next in line was Chatham with 271 sales reflecting a 1.5 percent increase over 2004. Taylorville sales were down 18 percent with 191 homes sold in 2005. The Sherman area and Rochester area recorded 104 sales each, reflecting a 38.7 increase and 22.4 percent increase, respectively.

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 2005 median sale price was $98,900, up 5.2 percent from 2004. Elsewhere, the Sherman Williamsville area registered an 13.9 percent increase in the median sale price maintaining its position as the most expensive area in the survey at $167,500. Riverton’s 2005 median price of $110,500 reflects a 21.4 percent increase over the 2004 median price. In the Rochester area the 2005 median home sale price of $161,000 was up 14.2 percent from 2004, while the Chatham area’s 2005 median price of $162,500 was up 12.1 percent. In Morgan County the Jacksonville median price of $90,000 experienced a 5.3 percent increase over the 2004 median price while in Christian County the Taylorville median price of $74,900 was relatively unchanged.

“The favorable climate for mortgage rates in 2005 obviously deserves much of the credit for the strength of our housing market,” said Dambacher. The average 30-year rate for all of 2005 was 5.9 percent nearly unchanged from the prior year’s average rate of 5.8 percent. " Although mortgage interest rates should rise modestly over the course of the year, they'll stay low enough to preserve favorable market conditions.” said Dambacher.

“2006 is picking up right where we left off in 2005 with various signs point toward brisk sales. For instance, our January 2006 pending sales index was up 24 percent over January 2005. Additionally, CAAR’s website located at www.SeeHouses.com, a popular web portal for home shoppers, experienced a 31 percent increase in traffic in January of 2006.” said Dambacher.

“In the coming months I predict that we will experience a market transition, moving from a prolonged boom to a more balanced period of sustainable sales,” Dambacher said. “In other words, home sales have been peaking for the last eight years and I anticipate that we will land on a high plateau in 2006. Investment fundamentals for housing remain solid, preserving generally favorable affordability conditions while offering solid returns as well as a place to live.”

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.

###