SPRINGFIELD (January 20, 2012). Home sales were down while home prices and time on market were up in 2011, according to a new year-end report by the Capital Area Association of REALTORS® (CAAR) Multiple Information Service.
Home sales in the Capital Area during the month of December 2011 amounted to 266 units, reflecting an increase of 1.1 percent from the 263 home sales recorded in December of 2010. Year-to-date home sales through December of 2011 revealed 3,218 unit sales, down 6.5 percent from the 3,441 units sold during the same period in 2010.
According to REALTOR Todd Musso, GRI, SRF, president of CAAR, home sales during the first half of 2011 told one story while sales during the second half of 2011 told another story. The impact of the homebuyer tax credit was still being felt as sales were down during the first half of 2011. However, that trend reversed itself during the second half of 2011 as sales were up over the second half of 2010. While home sales are headed in a positive direction we are still operating at ten year lows,” said Musso.
The median home sale price (for all single-family homes and condominiums) during December 2011 was $102,000, unchanged from the $102,000 December 2010 price. The median home sale price year-to-date through December of 2011 yielded $110,000, reflecting a 0.1 percent increase over the $109,900 median price during the same period in 2010. The median is a typical market price where half the homes sold for more, half sold for less.
“Modest, consistent and steady is how I would characterize the movement of home prices in the Capital Area over the past couple of decades. Last year was no exception as the median home sale price set another record in 2011. In large part, prices in 2011 were bolstered by continued low mortgage rates and a relatively balanced supply of inventory. Continued price stability is important because it signals to consumers that they can invest with the confidence of knowing that homes in the Capital Area generally hold their value,” said Musso.
The inventory of homes listed for sale at the end of December 2011 was 1,415, reflecting a 2.5 percent decrease from the 1,451 listings during December of 2010 and was at its lowest point in over five years. Current inventory levels stand at 1,450 homes and reflects a 5.4 month supply at the average monthly sales pace for the past twelve months.
“The number of sales pending at the end of December 2011 was 224, as compared to 206 sales pending at the same time in 2010. The average cumulative days on market in December of 2011 was 118 days, as compared to 117 days during the same month in 2010. The average cumulative days on market for year-to-date through December 2011 was 105 as compared to 99 in 2010.
During 2011 there were 120 new residential construction sales, reflecting a 24.5 percent decline from the 159 sales in 2010. New construction sales in 2011 made up 3.8 percent of all home sales in the Capital Area. The median price of a new construction sale reported through the MIS in 2011 was $237,500, reflecting a 10 percent increase over the $216,000 median price in 2010.
“While residential new construction unit sales were at their lowest level in at least fourteen years the median price posted a record high. This suggests that inventory levels have cleared out and that supply is more in line with demand. There is no doubt that the new construction side of the business is struggling. The last thing that we need is tougher building codes that would mandate things such as fire sprinkler systems in new residential construction. Not only would this add several thousand dollars to the cost of a new home and possibly lead to a reduction in demand but it could translate directly into fewer jobs and less spending in our community whether it’s in the form of wages or payments for building materials,” said Musso.
Musso says he sees the outlook for real estate in 2012 as still struggling but improving. “We are seeing signs of improvement but factors that could impact the market are foreclosures and interest rates as the economy improves. While I am cautiously optimistic about the coming year I am confident that the longer term outlook, over the next three to five years, will be even better,” said Musso.
The Federal Home Loan Mortgage Corp. reported that the national average commitment rate for 30-year, conventional, fixed-rate mortgages was 3.96 percent in December 2011, down from the 4.71 average rate during December of 2010. The average 30-year rate for 2011 was 4.45 percent versus 4.69 in 2010.
The Capital Area Association of REALTORS® is the Voice for Real Estate in the Capital Area representing nearly 800 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.
###