Lake Zurich-area home sales brisk as market time decreases 34% and inventory continues to favor sellers

Lake Zurich-area real estate witnessed another strong month in home sales though median sale price was off slightly from the positive trends established earlier this summer. The number of available homes for sale now favors sellers in many price points and distressed listings are rapidly disappearing from the marketplace. Meanwhile, mortgage rates continue to rise.

MARKET SNAPSHOT

• Median sales price dipped 3.4% year over year though the 12-month rolling average rose 2%
• The number of new listings in the predominant sale category of homes has increased 50.9%
• Under contract and closed sales continue solid gains established this year
• Average mortgage rates have increased for a 30-year fixed loan from 3.4% in April to 4.5% in August

Here is the story behind the headlines:

MEDIAN SALE PRICE: The median sales price for homes in the Lake Zurich area declined 3.4% year over year to $358,750. However, the 12-month rolling average has continued its positive trend since hitting a low in median sale price in February 2012.

CLOSED SALES:  Closed sales are up 49.1% to 85 for the month, continuing the strong showing in 2013. Sales are strong in all price categories and 4 newly constructed homes sold during the month, the highest level since late 2012.  Distressed property sales continued strong as short sales and foreclosures under contract and closed outpace new listings.

PERCENT ORIGINAL LIST PRICE: As market time decreased, Percent of Original List Price came in at a healthy 94.8%. This measure is up from 88.8% two years ago, when many sellers received low-ball offers from buyers who assumed they were desperate to sell.

Both these measures reflect sellers who are more realistic about the value of their property and buyers who are coping with a shrinking inventory.

UNDER CONTRACT:  Properties under contract continued the positive momentum in Lake Zurich-area real estate as 79 homes went under contract during the month. The 12-month rolling average shows strong positive trends continuing since the turnaround in early 2011. There are solid gains in all price points.

NEW HOME LISTINGS: The predominant category of home sales in the Lake Zurich area is the traditional sale (as opposed to distressed sales) of detached single family homes. This category grew 50.9% in new available properties to 80 from just 53 one year ago. There was only one short sale and 7 foreclosures as new listings this month. The strongest category of new activity is in the price range of $479,900 - $699,899.

INVENTORY: Inventory for the total Lake Zurich-area real estate market stands at 5.1 month’s supply. Inventory of homes listed below $479,900 is at just 3 month’s supply. As we've reported previously here is the standard definition of a buyer’s vs. a seller’s market: buyers are favored at 7+ months and homes continue to see downward pressure on pricing. At 5-6 months the market is “balanced” where both buyers and sellers have equal strength. Inventory at 4 months or less favors the home seller, as buyers scramble to purchase the few properties that are on the market. In this scenario home prices usually appreciate.

Katie Howard is Marketing Director with Prudential Visions Realty in Barrington. Whether you are buying, selling, investing, relocating or renting, Prudential Visions is ready to help with all your real estate needs. Visit us at http://besthomebrokers.com