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Midwest home sales up more than 9 percent from a year ago

by Timothy Inklebarger

Midwest home sales up more than 9 percent from a year ago

Across the nation, home sales were up 3.6 percent from November and 10.8 percent from December 2018, according to the most recent report released by the National Association of Realtors Wednesday. The seasonally adjusted rate was 5.54 million in December, compared to 5 million the previous year.

The Midwest region’s portion of the existing-home sales pie dropped in 2019 – losing 1.6 percent of the overall market. That’s compared to a 2.2 percent increase in the South, a 1.8 percent decline in the West and a flat rate in the Northeast.

Existing-home sales in the Midwest decreased 1.5 percent to an annual rate of 1.3 million in December – up 9.2 percent from the previous year. The median price was $208,500, up 9.2 percent from December 2018.

Illinois Realtors also released existing-home sales data today. Statewide, home sales of both single-family homes and condominiums in December were up 12.1 percent from this time last year. Median prices also saw an increase, edging up 7.2 percent from December 2018. Sales went a bit faster this year when compared to last; the average listing spent 58 days on the market in December, which was one fewer than last year at this time.

In the Chicagoland area, home sales were up 12.8 percent from last year and median prices were up 5.6 percent year over year. In the city of Chicago, home sales increased 9 percent from December 2018, and median prices went up 10.7 percent.

“December provided one of the few months of 2019 when both sales and prices increased on a monthly and an annual basis, with sales increases reflecting national trends,” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois.

Looking over the entire year, statewide home sales did see an overall decrease, while median prices continued to see year-over-year increases for the eighth year in a row. Home sales were down 2.6 percent from 2018’s total, while prices inched up 3.4 percent.

The association predicted similar activity throughout 2020. “More temperate December weather and attractive mortgage rates set the state up for a strong finish to a year that has been marked by sales swings,” said Ed Neaves, president of Illinois Realtors and designated managing broker of Berkshire Hathaway HomeServices Snyder Real Estate in Bloomington. “Looking ahead, it is possible that 2020 will look a lot like 2019.”

Total housing inventory was 1.4 million units – down 14.6 percent from November and 8.5 percent from the previous year, a fact that put a damper on the positive sales numbers.

“I view 2019 as a neutral year for housing in terms of sales,” said NAR chief economist Lawrence Yun in a press release accompanying the report. “Home sellers are positioned well, but prospective buyers aren’t as fortunate. Low inventory remains a problem, with first-time buyers affected the most.”

The median existing-home price jumped 7.8 percent to $274,500 in December from a year ago, marking 94 straight months of year-over-year gains.

Unsold inventory was at a 3-month supply, down from 3.7 months a year ago. Homes are selling faster compared to a year ago, according to the report, with properties remaining on the market an average 41 days in December, compared to 46 days at the same time in 2018.

First-time buyers represented 31 percent of December’s sales, down one percentage point from a year ago. But Yun said it remains a relatively favorable market for buyers and likely will be throughout 2020.

“We saw the year come to a close with the economy churning out 2.3 million jobs, mortgage rates below 4 percent and housing starts ramping up to 1.6 million on an annual basis,” he said. “If these factors are sustained in 2020, we will see a notable pickup in home sales.”

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