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McHenry County home sales fall 22 percent

Published: Thursday, March 20, 2014 12:51 p.m. CDT • Updated: Thursday, March 20, 2014 1:33 p.m. CDT

CRYSTAL LAKE – Homes sales in McHenry County fell 22 percent in February as inventory continued to decline amid a difficult winter.

Nationally, sales of existing homes slipped in February to their lowest level since July 2012 as severe winter weather, rising prices and a tight supply of homes discouraged buyers.

Last month, McHenry County home sales declined 22 percent to 237, down from 304 during February 2013. Year-to-date, home sales were down 14.2 percent to 506, compared with 590 in the first two months of 2013, according to figures released Thursday by the Illinois Association of Realtors.

The median sales price in McHenry County was up 5.5 percent to $145,000, compared with $137,500 in February 2013. The median sales price for single-family homes in the county increased 9.6 percent to $170,000, and condo sales prices were up 18.6 percent to $99,900 last month. Countywide, real estate prices remain well below pre-recession levels.

In February, the inventory of homes for sale in McHenry County dropped 17.9 percent to 1,840, down from 2,241 in February 2013. Homes also spent less time on the market. The number of days on the market until sale was 82 last month, a decline of 15.5 percent from 97 days in February 2013.

In Kane County, existing home sales dropped to 396 in February, down 8.5 percent from 433 in February 2013. The median sales price for all properties increased 7.8 percent to $139,000 last month, compared with $129,000 in February 2013. Kane County’s inventory of homes dropped 23.9 percent to 2,357, down from 3,098 in February 2013.

In Lake County, existing home sales dropped to 464 last month, a 21.2 percent decline from 589 in February 2013. The median sales price dropped 8.9 percent to $139,850, compared with $153,500 in February 2013. Lake County's inventory of homes fell 27.3 percent to 3,262, down from 4,484 in February 2013.

Nationally, sales declined 0.4 percent last month to a seasonally adjusted annual rate of 4.6 million, the National Association of Realtors said Thursday. That was the sixth decline in the past seven months.

Freezing temperatures and snowstorms likely kept many buyers from visiting open houses. And higher mortgage rates have weighed on sales since last fall.

Still, there were some signs that the market could pick up in the coming months. Sales improved in the South and West, where weather was less of a factor. And more people decided to sell, boosting the supply of available homes 6.4 percent to 2 million.

"Once we get past this messy period, housing should assume its role in supporting overall growth," Jennifer Lee, an economist at BMO Capital Markets, said in a note to clients.

Home prices are rising despite the sluggish sales, a sign that the number of homes for sale remains low. The median sales price has risen 9.1 percent in the past year, the Realtors said, to $189,000.

Investors are accounting for an increasing share of purchases, while first-time buyers remain historically low. All-cash sales, which are mostly by investors, rose to 35 percent of purchases in February, up from 32 percent a year ago.

First-time buyers accounted for only 28 percent of sales in February, slightly more than in January. That's far below the 40 percent that's typical of a healthy market. First-time buyers are being held back by tight credit standards and high levels of student loan debt, the Realtors said.

Sales of existing homes climbed steadily in the first half of last year, reaching an annual pace of 5.38 million in July. And sales totaled 5.1 million in all of 2013, the most in seven years. That's still below the 5.5 million that is consistent with a healthy housing market.

But sales slowed in the fall as rising mortgage rates and higher home prices began to squeeze some buyers out of the market. Freezing temperatures and winter storms also kept prospective buyers away from open houses.

Sales have fallen 14 percent since July.

The average interest rate on a 30-year mortgage slipped to 4.32 percent last week from 4.37 percent. Rates have risen about a full percentage point since hitting record lows last spring.

• The Associated Press contributed to this report.

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