Housing slump proves challenging for area real-estate agents
CHAMPAIGN – Wes Cravens bought a house in Champaign's Sawgrass subdivision two years ago when he moved here to take a job as a software engineer.
Now his three-bedroom house on Trailway Drive is on the market as he and his family contemplate moving to a larger house.
The house has been up for sale only three weeks, but already Cravens has noticed the market has changed since 2006.
At that time, the family had a baby on the way, and he needed to find a house quickly. But he couldn't find much in the size, style and location he wanted.
"When I look now, there are tons of them," he said. "There's a much bigger inventory now."
The slow market is testing not only the patience of people trying to sell their own homes, but also the perseverance of real-estate agents.
Wes Cravens, who is trying to sell his house on Trailway Drive in Champaign, has noticed a change in the housing market since he bought the home two years ago. The inventory of available homes is now much larger, resulting in a buyers' market. By Vanda Bidwell
"They're working harder. They're having more open houses if they can," said Barb Manka, president of the Champaign County Association of Realtors. "They're sponsoring more Realtor luncheons. They're doing more on the Internet, trying to cover all bases."
Through August of this year, Champaign County home sales were running 21 percent behind the first eight months of last year.
And although some home prices are falling, the median home price in Champaign County was actually up slightly in the second quarter.
Manka, an agent with Prudential Snyder Real Estate, said June was a slow month, but activity picked up a bit in July. August figures, released on Friday, were down from July and down from a year ago.
"We're still doing well; we're not at the bottom of the barrel by any means," Manka said. "We had a slow spring because of the rain. But people are starting to adapt to the market. A few Realtors are getting buys again. They weren't earlier in the year."
Area home builders are weathering the soft market too, both in terms of homes built for specific clients and those built on speculation.
"We're definitely seeing a slowdown in both those areas, more significantly in specs. They're slower to sell," said Paul Phillips, president of the Home Builders Association of East Central Illinois. "Guys still seem to be doing a pretty strong number of pre-sold and contract homes. We've seen some slowdown in the spec market, but we're in a community that's still in a positive growth mode. We're not experiencing things that some markets are."
Homes are staying on the market "probably three to five months, when it used to be one to three," he said.
Phillips, the vice president of Armstrong Construction, said if there's one part of the market that's slower, it's the top end – the $500,000 to $700,000 range – "but those are most always contract homes, where it's a one-step sale from the builder to the buyer."
From January through August of this year, 1,862 homes were sold in Champaign County, down from 2,368 in those eight months in 2007, according to the Champaign County Association of Realtors' Multiple Listing Service.
Home sales totaled $288.5 million countywide, or about 20 percent less than the $359.9 million in sales in the same time frame last year.
Statewide, second-quarter home sales were down 25.4 percent from a year ago. The median home sale price for that quarter was $192,500, down 6.8 percent from a year ago.
The Illinois Association of Realtors tried to put the best face on the market – but that required looking at it from the buyer's point of view.
"It is a good market, especially for buyers who now have many choices," Kay Wirth, president of the state association, stated in a release.
"The new first-time buyer tax credit and foreclosure rescue program enacted by the Housing and Economic Recovery Act should help stabilize the housing market," she said.
David Strang, senior vice president for mortgage lending at Busey Bank, said the big difference in real estate lending these days is that "restrictions are much tighter than they were."
That's especially true of programs offered by the Federal Housing Administration and other agencies to make home ownership available to more people, he said.
"A lot of the low down-payment or no down-payment money has dried up," Strang said.
Plus, "the rules are constantly changing," he said.
"We try to put you into a program, and two weeks from now, something changes. ... It's sort of a moving target," he said. "It probably has caused more people not to qualify for exactly what they want."
Strang said the Champaign County housing market is insulated, when compared with markets in other parts of the country, such as Florida, California, Ohio and Michigan.
"Our delinquency rates are minimal. Our loan losses are minimal. Certainly we have foreclosures, more than we normally have, but those are still minimal," he said.
At Busey, delinquencies account for less than 2 percent of all mortgages, he said.
"Our mortgage market is still very good," Strang said of the local market. "There's not been a big hit yet in terms of home values plummeting."
According to the Illinois Association of Realtors, 38 of the state's 102 counties had increases in the median home sale price in the second quarter. Champaign County's was up 0.1 percent to $143,000. Vermilion County's was up 10.7 percent to $83,000, but the number of home sales in the second quarter was down 35 percent from a year earlier.
Several other counties in central Illinois – many of which have lower median prices than Champaign County – saw small to medium-sized spikes in the second quarter.
For instance, Peoria County's median price rose 13.2 percent to $129,000; Coles County's increased 9 percent to $85,000; Macon's was up 4.2 percent to $92,500; and Sangamon's rose 2.5 percent to $117,825.
The median price – the point at which half the homes sell for less and half sell for more – is not the same as the average price, however.
In Champaign County, the average selling price in August was $165,578, up from $151,752 in July and up from $156,825 in August 2007. During the second quarter of the year, the average sales price in Champaign County was $164,535, while the average sales price in Vermilion County was $94,118.
