July 2024 Market Update
Written on July 3, 2024 by Nick WardThis 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.
Year over year Analysis
For the most recent twelve months (07/01/2023-6/30/2024) the MLS reported 1,546 sales with a median sale price of $220,000 and a reported average marketing time of 29 days. For the prior twelve months (07/01/2022-6/30/2023) the MLS reported 1,813 sales with a median sale price of $196,000 and a reported average marketing time of 31 days. This shows a decrease in the number of sales of 267 homes or -14.7%. The median sale prices saw a 12.2% increase year-over-year. There are currently 170 homes on the market with an average marketing time of 82 days. This results in a 1.3-month supply of homes in inventory, which is a significant shortage relative to historical supply demand relationships in this market. Please note that the average marketing time of active listings is significantly above the average for closed sales in the prior 12 months.
Interest Rates
In 2020, rates varied from 3.5% to 3.6% through March. During the peak of the Covid-19 pandemic the Federal Reserve cut the interest rate, which resulted in more volatile interest rants that fluctuated within the 2.0% to 3.5% range. In the first quarter of 2022 we saw a sharp increase in interest rates. Interest rates peaked in our area around 8.25% in summer of 2023, and have since come down and fluctuate between 6.75% and 7.75%. With the slowing of the rate of inflation is likely that we will see interest rates stabilize at their current point. Many experts are predicting rates will marginally decrease in the coming year, but we have yet to see any significant change. Please note that the interest rate can vary significantly between lending institutions and borrower qualifications. Contact your Joel Ward Homes agent for recommendations!
Employment
The close connection between employment levels and the strength of housing markets has been well established, both locally and on a national basis. In May 2024 (the last month for which data has been published) there were 111,020 employed people in Champaign County and an unemployment rate of 4.2%. In May 2023 there were 106,079 people employed with an unemployment rate of 3.7%. This results in a 4.7% increase in the number of people employed. 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.
Conclusions
The primary factor in the residential market is a significant shortage of supply of homes in inventory. While we are still seeing some houses selling within days and experiencing multiple offer situations, the market is moving somewhat slower with some properties experiencing longer marketing times. We are also seeing a split in the market with competitively priced houses selling in under two weeks while many other houses sit for 60 to 90 days before a sale. Many of these properties with longer exposure time see several price reductions prior to coming under contract.
What does this mean to the home seller? The primary differentiator between houses that sell in two weeks and those that take 80+ days is pricing. Properties that are competitively priced are still experiencing multiple-offer situations and sale prices above list price. However, properties that are even priced even 5% above market are experiencing significantly longer marketing times, and most often sale prices below list price after price reduction.
The market for buyers in many market segments under $400,000 is extremely competitive, especially for “move-in ready” properties. Buyers should be prepared to enter into multiple offer situations and discuss offer strategies with the agents prior to presenting any offers.
