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McHenry County homes sales fall 7.7 percent in January

Published: Friday, Feb. 21, 2014 4:38 p.m. CDT • Updated: Friday, Feb. 21, 2014 11:55 p.m. CDT

CRYSTAL LAKE – Homes sales in McHenry County fell 7.7 percent in January as cold weather and limited inventory held back sales across the county.

Nationwide, sales of existing U.S. homes plummeted in January to the worst pace in 18 months.

Sales of existing McHenry County homes fell to 264 in January, down 7.7 percent from 287 in January 2013, according to figures released Friday by the Illinois Association of Realtors. The median sales price increased 14.2 percent to $145,000 in January, compared with $127,000 in January 2013.

The median sales price for single-family homes was up 15.5 percent to $175,000 and condo prices were up 5.8 percent to $95,250 last month. Countywide, home prices remain below 2009 levels.

In January, the inventory of homes for sale in McHenry County dropped 23.5 percent to 1,753, compared with 2,292 in January 2013. Homes also spent less time on the market. The number of days on the market until sale was down to 86 days, an 18.1 percent decline from 105 days in January 2013.

In Kane County, existing home sales dropped 7.4 percent to 402, down from 434 in January 2013. The median sales price for all properties increased to $156,500 last month, up 20.4 percent from $130,000 in January 2013. Kane County’s inventory of homes dropped 25.2 percent to 2,287, down from 3,058 in January 2013.

In Lake County, existing homes sales hit 574 last month, a 3.1 percent increase from 557 in January 2013. The median sales price increased 16.1 percent to 161,500 last month, compared with $139,160 in January 2013. Inventory was down to 3,162 homes in January, 29.7 percent lower than 4,497 in January 2013.

Nationwide, sales fell to a seasonally adjusted annual rate of 4.62 million units last month, the National Association of Realtors said Friday. That was down 5.1 percent from the December pace. The sales rate declined 5.1 percent over the previous 12 months.

Higher mortgage rates and higher prices have contributed to a slowdown in home buying in five of the past six months. Freezing temperatures and snowstorms also have caused most housing activity to slip this winter. The flagging sales suggest a deceleration from the momentum for much of 2013, when 5.09 million homes were sold, the most in seven years.

“Such a picture confirms that the U.S. housing market reached its peak at the end of 2013, and further reacceleration is unlikely near term,” Annalisa Piazza of Newedge Strategy said in a research note.

Home building dipped 16 percent in January from December, the Commerce Department said this week. Signed contracts to buy homes plunged in December, foreshadowing the January drop-off, the Realtors said in a separate report.

The weather has kept would-be buyers from venturing to open houses, while construction crews have endured work stoppages.

But sales also declined in parts of the country where weather was less of a factor. This suggested that price pressures and tight inventories are also weighing on the real estate market.

Buying fell 7.3 percent in Western states, the region less affected by winter storms and where average prices are the highest. That decline was significantly larger than in the Northeast, South and Midwest. The median price of homes in the West is $273,500, almost double the median price in the Midwest.

The median price nationwide has risen 10.7 percent to $188,900 since January 2013. There are just 4.9 months of available inventory on the market, a sign that would-be buyers have relatively few homes to pick from and may choose to delay purchases.

Just 26 percent of sales last month were by first-time buyers. In a healthy market, that figure is closer to 40 percent. All cash-sales accounted for 33 percent of all purchases, evidence that investors continue to make up a sizable share of the sales.

Existing-home sales in a healthy market would approach 5.5 million, nearly 900,000 more than the January rate. Buying has slowed during the past six months.

Over the summer of 2013, home resales reached a pace of 5.39 million. But they began to slow in September as the costs of buying a home rose because of rising prices and higher mortgage rates.

The average rate on a 30-year mortgage rose to 4.33 percent this week from 4.28 percent the previous week. Rates surged about 1.25 percentage points from May through September, peaking at 4.6 percent.

• The Associated Press contributed to this report.

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