The busy summer homebuying season is off to a slow start in Bloomington-Normal.
There were 283 homes sold in May, down from 317 a year ago, the Bloomington-Normal Association of Realtors reported. Overall home sales are down 10.8 percent in 2018 versus the first five months of 2017, BNAR reported.
BNAR President John Armstrong said the market for newly built homes is struggling the most, down 39 percent so far this year. Only 62 new homes have been sold this year. (The vast majority of sales are existing homes.)
One reason for the low demand for new construction, Armstrong said, is the affordability of existing homes. Indeed, the average price of an existing home is flat for the year, around $164,607.
“2017 was a great year for the Bloomington-Normal real estate market, so trailing those numbers is not a huge concern," Armstrong said.
In fact, the pace of sales in Bloomington-Normal in 2017 fell 1.9 percent below 2016 levels, to 2,804 total existing and newly built homes, BNAR reported previously.
Local Realtors have pointed to low inventory—meaning not enough homes are on the market in certain price ranges to meet demand—for the sales slowdown.
In the Midwest, existing-home sales declined 2.3 percent to an annual rate of 1.26 million in May and are now 2.3 percent below a year ago. The median price in the Midwest was $209,900, up 4.2 percent from a year ago.
Lawrence Yun, the National Association of Realtors chief economist, said a solid economy and job market should be generating a much stronger sales pace than what has been seen so far this year.
“Closings were down in a majority of the country last month and declined on an annual basis in each major region,” he said. “Incredibly low supply continues to be the primary impediment to more sales, but there’s no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers, and ultimately keeping some from reaching the market.”
June is usually the busiest month for home sales in Bloomington-Normal.
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