DeKalb County home sales slump 14.5 percent in October

November 23, 2016

DeKALB – Home sales in DeKalb County fell 14.5 percent in October as prices increased slightly and the inventory of homes on the market continued to decline.

Sales of existing homes in the county fell to 100 last month, down from 117 in October 2015, according to figures released Tuesday by the Illinois Association of Realtors. Closed sales were up 2.4 percent to 1,044 through October, compared with 1,020 closed sales during the same 10-month period in 2015.

The median sales price in the county increased to $139,000, up 3 percent from $135,000 in October 2015. For the year, the median sales price at the end of October was up 4.8 percent from $145,000 to $152,000.

On Tuesday, the least expensive home for sale in DeKalb County was listed at $34,900. The listing said the 950-square-foot, 3-bedroom, 1-bathroom home at 316 Park Avenue in Sycamore needed “total remodeling.” The most expensive home on the market Tuesday was listed at $895,000. The historic 1884 Ellwood family Victorian estate at 329 N. Third St., DeKalb, has six bedrooms and four bathrooms, according to real estate firm Zillow.

Single-family home median sales prices fell 3 percent to $135,000 last month in DeKalb County, while condo prices jumped 23.5 percent to $145,750. The IAR report noted that activity for one month can look extreme because of a small sample size.

The total number of homes for sale in the county declined to 393 in October, a 15.8 percent drop from 467 homes in October 2015. However, homes on the market sold at a quicker pace. The average number of days on market until sale was 67 in October, down 1.5 percent from 68 days in October 2015. For the year, homes have spent an average of 67 days on market until sale, down 14.1 percent from 78 days during the same 10-month period in 2015.

Statewide, a decline in inventory and a seasonal slowdown “helped drive Illinois home sales lower in October, even as median home prices continued to post solid annual gains,” according to an IAR news release.

Statewide home sales in October totaled 12,469 homes sold, down 5.4 percent from 13,186 in October 2015. The statewide median price in October was $179,000, up 6.9 percent from October 2015, when the median price was $167,500. The median is a typical market price where half the homes sold for more and half sold for less.

“While sales were softer in October on an annual basis, much of this can be attributed to a typical seasonal slowdown and the chronically low number of homes on the market,” IAR President Doug Carpenter said in a statement. “Given the relatively short time it is taking on average to sell a home, strong market demand might work to a seller’s advantage as we start to close out the year.”

Nationally, Americans bought homes in October at the fastest pace in nearly a decade, helped out by low mortgage rates that have since started to climb after the presidential election of Donald Trump.

The National Association of Realtors said Tuesday that sales of existing homes rose 2 percent to a seasonally adjusted annual rate of 5.6 million. Sales reached their strongest pace since February 2007, a sign that the market still is healing from the collapsing prices and foreclosures that ignited the 2008 financial crisis.

A stable job market and historically cheap borrowing costs have spurred demand from homebuyers this year. But sales growth has been tempered somewhat by accelerating prices and a shortage of properties on the market. Sales gains possibly could slow in the coming months, as rising mortgage rates are making home loans more expensive.

“Clearly, the market continues to underestimate just how much demand for homes is out there, even in the face of tight inventory and rising existing home prices that are now the highest on record,” said Svenja Gudell, chief economist at Zillow.

Falling mortgage rates helped boost sales for much of the year, but rates surged after the election. The increase means that yearly debt payments for a median-priced home would increase by more than $500 on average for people trying to buy homes in November and December.

Investors expect the federal budget deficit to rise in a Trump administration, causing the yield on 10-year U.S. Treasury notes to reach about 2.3 percent.

The rising interest rates trickled into the housing market. The average 30-year, fixed-rate mortgage climbed to nearly 4 percent from less than 3.5 percent at the end of October. Few housing experts said that higher rates at this stage will fully disrupt sales, although it might cause some existing homeowners to stay in place rather than upgrade to new homes and costlier mortgages. The impact of higher rates could be offset if wages accelerate strongly during a Trump administration, giving Americans higher incomes.

Still, the supply crunch of the past year shows little sign of reversing itself.

Sales listings have fallen 4.3 percent over the past year to 2.02 million homes. The shortage has pushed up the median sales price of existing homes 6 percent from a year ago to $232,200.

The low mortgage rates aided buyers with solid credit, although tighter lending standards appear to have hurt potential sales.

An analysis released this week by the Urban Institute, a Washington-based think tank, found that there could have been an additional 1.1 million mortgages issued in 2015 if traditional lending practices had been in place that put less emphasis on stronger credit scores above 700.

The tighter credit standards have helped foster a housing market that prefers cash buyers and investors who may be more likely to rent homes to tenants than live in them.

• The Associated Press contributed to this report.

By the numbers

Closed sales (October 2016): 100

Closed sales (October 2015): 117

Median sales price (October 2016): $139,000

Median sales price (October 2015): $135,000

Inventory of homes for sale (October 2016): 393

Inventory of homes for sale (October 2015): 467

Source: Illinois Association of Realtors