Champaign County Area Housing Market Ends Year on High Note

Champaign County Area Housing Market Ends Year on High Note;
Despite Pandemic, Home Sales Reach Highest Mark Since 2006

In the midst of a global pandemic that lasted most of the year, Champaign County area home sales surpassed all expectations in 2020 reaching the highest year-end totals not seen since 2006, according to the Champaign County Association of REALTORS®.

Year-end 2020 total home sales of 3,098 units were reported, up 12.49 percent from 2,754 in 2019. Home prices continued to gain on a year-over-year basis with the median home sale price for 2020 for the Champaign County area standing at $167,625, up 7.28 percent from $156,250 in 2019. The average home sale price for 2020 for the Champaign County area increased 6.26 percent to $189,871 from $178,680 in 2019.

CCAR reports a total of 242 homes were sold in December, up 14.69 percent from 211 homes sold in December of 2019. For the month of December, the median home sale price was $168,350, up 1.42 percent from $166,000. The average home sale price for the month of December was $189,129, off 1.76 percent from $192,522 in December of 2019.

“Despite the global uncertainty about the pandemic, the Champaign County area housing market reported ten out of twelve months in positive territory in 2020 to bring sales ahead of 2019 totals. Overall sales surged the highest during the summer months after the shut-down period, but home sales have continued in positive territory this winter as well,” said Liz McDonald, president of the Champaign County Association of REALTORS®. “Mortgage rates hit historic lows in 2020 and the ability to work from home encouraged more buyers to evaluate their home space, thus fueling the demand to reach sales levels not seen since 2006.”

The average rate on a 30-year fixed rate mortgage, according to the Federal Home Loan Mortgage Corporation (Freddie Mac) was 2.68 percent in December versus 3.72 percent in December 2019 and down from 2.76 percent in November of 2020.

“Heading into 2021, mortgage rates are expected to remain flat or rise only modestly off 2020 record lows, continuing to encourage demand for homeownership. Constant purchase demand from buyers and overall tight inventory levels will continue to put pressure on housing prices,” said McDonald. “We expect to see more homes coming on the market later in the year as the rollout of the vaccine makes people more comfortable to be out and about as they have been evaluating their housing options.”

Pending sales, a sign of future real estate activity, increased 32 percent in December of 2020 from December a year ago, according to Midwest Real Estate Data LLC. There were 142 pending sales in December as compared to 107 in December of 2019. Pending sales in the month of December reflect the total number of active listings that went under contract and are awaiting a closing usually 30 to 60 days in the future. Inventory of homes for sale dated January 21, 2021 stood at 647 properties on the market. The number of new home sales rose 18.26 percent in 2020 to 136 homes versus 115 in 2019.

Dr. Lawrence Yun, chief economist with the National Association of REALTORS® predicts that nationwide home sales to rise by around 10 percent in 2021. “During the pandemic, we learned that most people who work in offices could be just as productive at home, and this new reality will help fuel home sales in the post-pandemic economy,” said Yun.

The National Association of REALTORS® reports that millennial buyers (age 22-39 years old) made up the largest share of homebuyers in 2020 at 38 percent.

“Low inventory and multiple offers on properties are likely to remain commonplace while the market waits for more home sellers to provide more balance to the market,” said McDonald. “

According to Geoffrey J. D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois in the 2021 Housing Price forecast for the Illinois REALTORS®, median prices are forecast to continuously grow in 2021 within a higher and broader range compared with 2020. As for sales, he forecasts positive gains as well.

“The uneven impact of the COVID-19 pandemic on employment by sector and income level is likely to be reflected in the housing market in 2021” noted Geoffrey J.D. Hewings, Director of the Regional Economics Applications Laboratory of the University of Illinois. “With increasing opportunities to work-from-home for higher income employees, analysts suggest an increased demand for larger homes perhaps in suburban and ex-urban locations while this flexibility is not available for lower-income employees especially those in the retail, leisure and hospitality sectors where layoffs and furloughs have been more severe, dampening both demand and supply of homes in the bottom 25% of the price distribution.”

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