Solid information about our local market is helpful for everyone, and especially for our clients who are thinking about entering into a real estate transaction this year.
This update is based upon information supplied by the Champaign County Association of REALTORS Multiple Listing Service for all attached and detached single-family properties in Champaign, Savoy or Urbana. It is important to keep in mind that specific segments of the market may have performed better or worse than the overall market analyzed below.
Comparing the Last 12 Months with the Previous 12 Months
For the most recent twelve months (02/01/2021-1/31/2022) the MLS reported 2,121 sales with a median sale price of $180,000 and a reported average marketing time of 44 days. For the prior twelve months (02/01/2020-1/31/2021) the MLS reported 1,945 sales with a median sale price of $172,500 and a reported average marketing time of 83 days. This shows an increase in the number of sales of 176 homes or 9.0%. The median sale prices saw a 4.3% increase. There are currently 138 homes on the market with an average marketing time of 127 days. This results in a 0.7-month supply of homes in inventory, which is a significant shortage relative to historical supply demand relationships in this market.
Please note that while the number of sales still significantly higher than the historical average for the month of November, the market has slowed considerably since its peak in July of this year
The Interest Rate Story: For most of 2017, 30-year fixed rate mortgages were available from 3.75% to 4.125%. Interest rates increased rapidly in January and February of 2018 and had remained relatively stable within the range of 4.5% to 4.75%. In September 2018, rates moved as high as 5% before starting to decline as the year ended. Beginning in 2019 rates started a decline.
In 2020, rates varied from 3.5% to 3.6% through March. Since then, and with the advent of the novel coronavirus pandemic and the Federal Reserve cutting the interest rate, rates have been more volatile and fluctuating within the 2.5% to 3.5% range. This trend continued in 2021 and into early 2022, but interest rates are beginning to rise. Currently, 30-year fixed rate mortgage financing is available at 4.00%. Many experts are projecting interest rates to increase over the coming 12 months. Please note that the interest rate can vary significantly between lending institutions and borrower qualifications. Contact your Joel Ward Homes agent for recommendations!
Local Employment Analysis
The close connection between employment levels and the strength of housing markets has been well established, both locally and on a national basis. In December 2021 (the last month for which data has been published) there were 106,818 employed people in Champaign County and an unemployment rate of 3.2% In December 2020 there were 102,913 people employed with an unemployment rate of 5.1%. This results in a 3.8% increase in the number of people employed. The current rate of unemployment is consistent with the rates since prior to the Covid-19 pandemic.
What follows is a graph showing the number of jobs in Champaign County, by month, based upon non-seasonally adjusted U.S Bureau of Labor Statistics data.
It is most notable that there is a significant shortage of homes in inventory, which is putting upward pressure on sales prices. This is most likely due to the combination of pent-up demand being released, along with the historically low interest rates.
What does this mean to the home seller? While we are currently in the slowest time of year, we are still seeing atypically short marketing times and high sales prices. The shortage of homes available, combined with the likelihood of higher interest rates are continuing to push sale prices upward. It is likely this will stabilize as interest rates right, but it is currently an excellent time to sell for top dollar. Contact your Joel Ward Homes REALTOR for the best options!
For buyers, the primary concern is the rising interest rates. Some project that rate increases will be significant, and it is very likely that interest rates will continue to increase during the year. This makes it important for buyers to move quickly and lock in long-term financing to offset risks posed by inflation and increasing interest rates. The current supply of homes in inventory is exceedingly low, which is likely going to make it more difficult to find suitable housing. This makes it even more important for your REALTOR to stay current on all homes which are listed for sale and meet your criteria.
Overall, Champaign-Urbana real estate has proven to be a good investment over time with an average annual appreciation rate of 2.6% since 2000, and this includes the 2009-2013 financial crisis and recession.
Remember that each particular segment of the market is different. If you are thinking about selling your home, or buying one, the best decision is to contact your Joel Ward Homes REALTOR to obtain current information about the specific segment of the market relevant to your property.