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Home sales decline in B-N, but prices are still climbing

 A for sale sign outside of a home in Bloomington-Normal
Emily Bollinger
WGLT file
The pace of home sales in Bloomington-Normal is down 15.6% so far in 2023. But prices are up, on average, 6.5%.

Home sales are down 18.3% in the first half of the year in the Bloomington-Normal area, according to a report from the Mid-Illinois Realtors Association. Yet the average price of a home rose more than 8.4%, to $233,607 in McLean and Dewitt counties.

At 15.6%, the sales drop in Bloomington Normal is less than for the region.

The rise in interest rates also could be affecting the outlook. Pending sales in the region are down 27.5% — and down 20% for the Twin City urban area.

Though pending sales in the area have dropped, National Association of Realtors chief economist Lawrence Yun said decelerating consumer prices could steadily lift sales and increase home production nationwide in a few months.

"CPI rose 3% from one year ago which is much lower than the 8-9% hikes of last summer and is the slowest gain in over two years. Falling gasoline prices and healthcare service costs were helpful. Rents are still climbing at a brisk pace, rising by 8.3% but have turned the corner. Rents were rising 8.8% in the early part of the year," said Yun.

He said that is the slowest rent gain in seven months, and there are signs of further calming in upcoming months. Apartment construction could cause rents to plateau by this time next year, said Yun, who also urged the Fed to stop raising interest rates. He claimed the body is too focused on jobs that are a lagging indicator instead of future inflation and leasing activity, which he said are early indicators.

In the first half of the year, 1,150 homes, condos, and zero lot line homes changed hands in the region. That is 258 fewer than at this time last year. Realtors still did nearly $269 million in regional business in the first half of the year, and $198 million in the Twin Cities alone. That's down about $35 million from last year for the region and $22 million in Bloomington-Normal proper.

Even though interest rates have chilled home sales, the housing shortage continues to boost sale prices.

The average price of a home sold in Bloomington-Normal is up 6.5% from last year. The average price in the Twin Cities in June was more than $282,000, and the urban average for the first half of the year was $267,000. The year-to-date average in the two-county region was more than $233,000.

WGLT Senior Reporter Charlie Schlenker has spent more than three award-winning decades in radio. He lives in Normal with his family.