SPRINGFIELD (February 10, 2004) Sales of existing single-family homes increased 12.5 percent setting an annual record in 2003 according to the Capital Area Association of REALTORS® (CAAR).

There were a total of 3,642 existing home sales during 2003, up 12.5 percent from the previous record of 3,236 set in 2002. The Capital area median existing single-family home sale price for 2003 was $92,000, reflecting a 2.3 percent increase over the previous year’s price of $89,900. The median is the midpoint in the price range; half the homes sold cost more, half cost less.

"Clearly, the historic lows we've seen in mortgage interest rates last year were 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," according to Richard Hanselman, CAAR President.

Springfield, the largest city in CAAR’s report, realized 2,162 existing single-family home sales in 2003 up 11.2 percent over 2002. Outside of Springfield the
largest number of home sales in a municipality was recorded in Chatham with 279 units sold in 2003 reflecting a 22.4 percent increase over 2002. Next in line was Taylorville with 204 sales reflecting a 12.1 percent increase from 2002. The largest year over year increase in sales occurred in Girard which had 47 sales reflecting a 123.0 percent increase over 2002.

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 2003 median sale price was $92,000 up 4.0 percent from 2002. Elsewhere, in the Rochester area the 2003 median home sale price of $155,000 was up 11.9 percent from 2002, the Sherman area 2003 median price of $135.000 rose 9.3 percent from 2002 while Chatham's 2003 median price of $138,000 was up 10.0 percent. The Petersburg area’s 2003 median price of $107,000 reflects a 5.9 percent increase over the 2002 median price while Taylorville’s 2003 median price of $70,500 reflects a 0.7 percent increase over the 2002 median price.

The average 30-year rate for all of 2003 was 5.8 percent, the lowest annual average since Freddie Mac started tracking interest rates in 1971. "With inflation under wraps, mortgage interest rates are staying at very low levels much longer than many people expected. This is extending the period of favorable housing market conditions and sustaining historically strong sales activity," according to Hanselman.

When considering all property types reported sold through the MIS (including farm, commercial, apartment, residential, etc.) the association reported a total of 4,059 sales in 2003, up 9.1 percent from 2002. Total dollar volume of all property sold in 2003 was $439.5 million reflecting a 16.2 percent increase over 2002 total volume of $378.2 million.

Hanselman said the fundamentals responsible for last year's housing record will be in play this year as well. "Home sales will be off mildly for the second or third best showing ever in 2004," he said. "With the economy improving and consumer confidence improving, a modest rise in mortgage interest rates will only slightly dampen the pace of home sales this year."

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.