Economic growth in the Rockford, Ill., region helped the housing market reach sales milestones in 2018 not seen in more than a decade.
Single-family home sales rose 3% in 2018 from 2017, according to the Rockford Area Association of Realtors. It's the fourth consecutive year of increased sales.
The 4,619 homes sold last year is the largest sales volume since 2007, the organization said.
The three-month rolling average sale price of a single-family home in the Rockford area rose 6%, to $135,578, about $7,700 more per home. That's the highest average sale price since 2008, when homes sold for an average of $138,251.
Single-family home sales in Winnebago, Boone and Ogle counties met or exceeded 2017 in eight of 12 months last year, while housing sales throughout Illinois were down 2.5% for the year.
"We've seen remarkable growth throughout the region," association CEO Conor Brown said. "Obviously, economic development is really the key to this whole endeavor of buying and selling houses. When people have jobs, certainly that is a main driver of them being able to afford homes."
Sales of newly constructed homes rose 25% last year.
"We actually hit triple digits for the first time in over a decade," Brown said. "We had 110 (new) homes sold in the Rockford area. New construction tends to bring a higher price volume. That bodes well certainly for all of our construction trades, as well as increasing our overall equalized assessed valuation."
Construction costs are still growing, Brown said, because of regulations, and the cost of materials and labor.
"If we're going to have a fully complete, healthy real estate market, we're going to have to have new construction return to this area," Brown said. "While certainly having 110 new homes (sold) is positive news, we need to grow that number even more for 2019."
The sale of distressed properties — real estate that is under foreclosure or being sold by the lender — fell for the fifth straight year, from 12.1% of total sales in 2017 to 9.3% last year.
"Just five years ago, we hit levels as high as 55% of total housing sales from distressed property sales," Brown said.
The number of homes in foreclosure declined 13%. Rockford's foreclosure inventory has been nearly cut in half since 2014.
The region reached several key economic milestones fueling the uptick in the local real estate market, according to the Rockford Area Economic Development Council.
Job growth rose 99% to nearly 2,000 new or retained jobs, space occupancy rose up to four times the 2017 level to approximately 2 million square feet of new and renovated space, and capital investment rose more than three times to more than $183 million.
"The Rockford region outpaced 19 Chicago submarkets at three times their average growth rate," RAEDC President and CEO Nathan Bryant said. "This is the kind of regional economic growth that holds promise for long-term growth for the Rockford region economy and housing market."
There are some potential storm clouds on the horizon.
Concerns about the economy and the prospect of significant increases in interest rates could dampen local housing sales in 2019, Brown said.
"However, we remain highly confident," Brown said. "With the Rockford region experiencing a strong economic expansion, this should temper our concerns and provide us with another remarkable year of housing and economic growth."
