Alice and Paul Beckett found their dream home on the first try.
The Wilsonville couple had glanced at a few homes but were not in the market to buy. They noticed there was not a lot of variety.
“That’s why when we saw this house we were like, ‘We have to have it,'” said Alice Beckett. “I just drove by it one day and saw a for sale sign. I was like ‘that house is amazing.'”
After making a $320,000 cash bid, the Becketts were are set to close the deal on their dream home in Bunker Hill in Macoupin County this Monday.
“I got real lucky,” Alice Beckett said.
The Becketts’ experience was unique.
With rising interest rates and low housing inventory, purchasing a home has become a lengthy and sometimes difficult process for buyers.
“Pre-pandemic, buyers had their pick of houses,” said Dominic Campo, secretary and treasurer of Capital Area Realtors and co-owner of Campo Realty Incorporated. “They had options. Now, it can take weeks or months to purchase a home.”
The average sale price of a home in the capital area was $168,000 in 2019 and $179,000 in 2020 according to Oldenettel. A typical Sangamon County home listed for $149,000 in April according to Realtor.com
Capo said on average $174,404 will get a buyer a single-family home in Springfield.
Currently, we are in a sellers’ market, according to Capo.
“It’s not uncommon for buyers to go $15,000-$20,000 over asking price,” Capo said.
There are multiple-offer situations with many homes in the market. It’s not the majority of offers but it is increasing, according to Capo.
Supply and demand are contributing to the rising prices of homes.
“We have a high number of investors buying homes. Because of that, a small number of homes are available,” Oldenettel said.
Another factor? A stagnant population. “We have the same number of buyers but not the same number of sellers, Oldenettel said. Realtors are working with less and less inventory.
“We usually have three to four months of inventory during normal times. Now, we have half of a month.”
Three to four months of inventory would be about 1,200 homes. Half of a month’s worth of inventory is about 300 homes.
“Pre-pandemic, Sangamon County had over 1,000 listings. Right now, we barely have over 100 listings. We are in a historic housing shortage across the nation,” Capo said.
Furthermore, most home sellers don’t want to sell in this market because there’s nothing for them to buy, creating a bottleneck, according to Capo.
Oldenettel said more listings are slowly coming on the market.
Furthermore, Illinois has the second-highest property taxes in the country, which has deterred some people from buying homes, Oldenettel added.
Add rising interest rates driving up the price of mortgages and some sellers are just hesitant to list their homes.
“As interest rates go up, buyer affordability goes down,” Oldenettel said. However, some buyers want to get it in and buy a home before interest rates rise even more.
Oldenettel said he has been in this business for 33 years and has seen the market go through ups and downs. When he first started, interest rates were in the double digits.
“The market will get better, but not overnight. It could take years.”
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