Although U.S. home sales plunged 13.4 percent in July, Illinois recorded double-digit gains. In Madison County, the news is also optimistic: home sales here, based upon closings reported in the multiple listing service, are up 15 percent for the first seven months of 2013 as compared to the same period in 2012.
Illinois home sales increased 28.5 percent over previous-year levels in July and media prices were up 14.2 percent, according to the Illinois Association of Realtors, proof of a strong summer housing market, says Michael Oldenettel, IAR president.
“The statewide median price in July was $169,000, up from $148,000 in July 2012,” said Oldenettel. The median is a typical market price, he notes, where one-half of the homes sold for more and one-half for less. “Slight increases in interest rates over the past few months have done little to slow interest in homeownership. Buyers are clearly comfortable enough with the way the economy is progressing to make a big purchase, and sellers are getting off the sidelines as they see prices begin to erase losses sustained during the recession.”
The inventory of homes for sale in July statewide was 67,466 units according to the IAR, which was a 24.7 percent decrease from the July 2012 total of 89,548 homes. Number of days it took for a home to sell via the MLS also decreased from July 2012 to July 2013, shrinking from 95 days on average in July 2012 to only 73 days this July.
Al Suguitan, president and chief operating officer of the Greater Gateway Association of Realtors, says from January through July of 2013 Madison County licensed real estate brokers recorded 1,767 home closings on the MLS compared to only 1,512 closings from January through July of 2012.
“This does not include any private home sales, such as new sales that occur directly between the builder and purchaser with no realtor involved,” said Suguitan. “So we’re probably a bit on the low side with these numbers. There could be a 3 to 5 percent differential. Overall, our Greater Gateway records confirm what the IAR is saying, that the numbers have come up. The real estate body is standing up straight and we’re moving forward. It’s very encouraging,” he added.
Suguitan says some recovery in the housing environment is detectable despite the overregulated business environment that exists. “Regulations are continuing to crop up, yet businesses are managing to begin recovering, and that’s a good thing,” he said. “The economy is beginning to show strength. People are indeed getting into homes. That’s what it’s all about. If we can continue that trend - perhaps more slowly as is customary in the third and fourth quarters - we can begin to recover.”
Issues that threaten to damper the local housing recovery in the American Bottom, however, Suguitan says, include FEMA and flood insurance classification/pricing on residential policies. Suguitan says he knows of too many recent examples wherein this issue specifically killed home sales at the nth hour.
“It had to do with the cost of the flood insurance premium,” he said. “The buyer was presented with an insurance quote for a home in Granite City that should have carried a premium of around $900 per year. It was $3,000 because of a recent FEMA reclassification of the home into a special flood hazard area. I also saw this happen with a home in Wood River. Both of these were moderately priced homes. This FEMA reclassification issue killed both real estate deals.”