Rockford Area Realtors experienced the best housing market in 12 years--reaching new milestones in both total sales and average price in 2018--fueled by economic growth of the Rockford region.
Sales increase 3% in 2018 Housing sales increased 3% from 4,483 sales in 2017 to 4,619 properties sold in 2018. This was the fourth straight year of annual increases and the largest volume of sales in the last 12 years (sales reached 5,844 homes in 2007).
Sales up 8 of 12 months "A sign of the Rockford housing strength is that sales met or exceeded 2017 volume in 8 of 12 months, commented Conor Brown, CEO, Rockford Area Realtors, said. "The U.S. and Illinois housing markets fared a decidedly more mixed trend, with Illinois housing sales down 2.5% for the year."
Average price up 6% The three-month rolling average price rose 6% or about $7,700 per home sold last year. The average price increased from $127,791 in 2017 to $135,578 in 2018. This marked the highest average price in 11 years, when homes sold for $138,251 in 2008. The average Rockford price increase at a 66% rate greater than the average home price increased in Illinois last year.
Distressed property sales down to 9.3% Another major milestone: A significant drop in distressed property sales. Distressed properties fell from 12.1% of total sales in 2017 to 9.3% in 2018, the fifth year of sustained declines.
"Just five years ago, we hit levels as high as 55% of total housing sales from distressed property sales," Conor said. New home sales over 100 for first time since 2010 Another bright spot in the local housing market was new home construction. A total of 110 new construction homes were sold in 2018--the first time since 2010 the number reached over 100 homes--25% higher than new construction sales of 86 in 2017.
52 straight months of inventory drop Lack of inventory was a major sticking point in last year's market and will be a key factor this year. Through December the Rockford market experienced 52 straight months of lower monthly inventory than the previous year. The average monthly inventory of 1,053 homes for sale in 2018 was 13% lower than the average of 1,209 in 2017. This was the lowest monthly inventory level since stats were first collected, dating back to 1998.
"Even though the average price rose 6% from 2017 to 2018, sellers are somewhat staying on the sidelines with inventory hitting a new historical low," Conor said. "If Rockford's inventory woes continue in 2019, not only could this be a major contributor to a run-up in home prices, but entry level single family homes will further tighten, locking some first-time homebuyers out of the market."
Highly confident about 2019 Conor said added concerns about the uncertainty of the economy and significant increases in interest rates could also potentially dampen housing sales in 2019. "However, we remain highly confident," Conor said. "With the Rockford region experiencing a strong economic expansion, this should temper our concerns and provide us with another remarkable year of housing and economic growth."
Data courtesy of the Rockford Area Association of Realtors Rockford, IL