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Home sales fall 8.8 percent in May

CRYSTAL LAKE – McHenry County home sales declined 8.8 percent in May as prices increased and the number of homes on the market continued to fall.

Statewide, home sales were down 9.4 percent last month while prices were up 8.3 perent from a year ago, according to statistics released Monday by the Illinois Association of Realtors. Nationally, sales of previously owned U.S. homes posted the best monthly gain in nearly three years in May, providing hope that housing is beginning to regain momentum lost over the past year.

McHenry County home sales tumbled 8.8 percent to 444 in May, down from 487 is May 2013. Year-to-date, closed sales in McHenry County are down 11.4 percent to 1,638, compared with 1,849 during the first five months of 2013.

The median sales price increased 9.1 percent to $168,000 last month, up from $154,000 in May 2013. Year-to-date, the county’s median sales price is up 12.3 percent to $158,000. The median sales price fro single family homes increased 8.2 percent to $190,000 while condo the median sales price for condos jumped 15.3 percent. Despite recent gains, median prices remain below peak levels.

Statewide, the median price in May was $167,900, up 8.3 perent from May 2013 when the median price was $155,000, according to the IAR.

Fewer homes are coming on the market in McHenry County. The inventory of homes for sale in May slipped 7.9 percent to 2,143, compared with 2,327 in May 2013. And homes are spending slightly less time on the market. The number of days on market until sale dropped 2.5 percent to 79, from 81 in May 2013.

Satewide, inventory was down 7.6 percent and the days on market fell 7.3 percent to 76, compared with 82 days in May 2013.

In Kane County, home sales declined 15.2 percent to 659 in May, down from 777 during the same month in 2013. Year-to-date, homes sales were off 11.1 percent. The median sales price in Kane County hit $180,000 last month, up 9.1 percent from $165,000 in May 2013. Year-to-date, the median sales price in Kane County is up 12.3 percent to $165,900. Kane County’s inventory of homes for sale dropped 5.4 percent to 2,921, down from 3,089. The number of days on market until sale dropped to 62 in May, down from 70 in May 2013.

In Lake County, closed sales fell 12.9 percent to 898 last month, compared with 1,031 in May 2013. Year-to-date, closed sales were off 11.9 percent. The median sales price in Lake County last month increased 10.8 percent to $207,250, up from $187,101 in May 2013. Lake County’s inventory of homes on the market dropped 11.1 percent to 4,230 in May, down from 4,760 in May 2013. Last month, the number of days on market until sale dropped 14.5 percent to 65, compared with 76 in May 2013.

Nationwide, sales of existing homes increased 4.9 percent last month to a seasonally adjusted annual rate of 4.89 million homes, the National Association of Realtors reported Monday. The monthly gain was the fastest since August 2011, but even with the increase, sales are still 5 percent below the pace in May 2013.

“Sales appear to be moving up again, although the increase to date – over two months – reverses just a fraction of earlier weakening,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics, said in a research note.

Sales had been dampened by last year’s rise in mortgage rates from historic lows and various other factors including tight supplies and tougher lending standards.

The median price of a home sold in May was $213,400, up 5.1 percent from a year ago.

After hitting a recent peak of 5.33 million sales at an annual rate last summer, sales started sliding. Potential buyers have been grappling with a limited supply of houses, more expensive homes and lending standards which have been tightened in response to the housing boom of the past decade which resulted in millions of houses going into foreclosure.

Five years into the recovery from a deep recession that was triggered in part by the collapse in housing, housing sales have yet to return to their historic averages. Demand remains strong for the most expensive homes but has faltered for starter homes and those priced for middle class buyers.

The pace of home sales is below the 5.1 million homes sold in 2013 and off the pace of 5.5 million annual sales that would be consistent with a healthy housing market.

Lawrence Yun, chief economist for the Realtors, said because of the weaker start to sales this year, he expects that sales for the entire year will be down 3.1 percent this year to 4.9 million, compared with 5.1 million sales of existing homes in 2013, which had been a 9.2 percent rise from 2012. Yun said he was predicting a stronger second half for sales this year but he said that would not be enough to compensate for the weakness at the start of this year, a slowdown that reflected in part a harsh winter.

• The Associated Press contributed to this report.

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