Numbers backing up Realtors, homebuyers who claim market is finally on rebound

At 9 a.m. March 21, a house went on the market in Savoy's Prairie Fields subdivision.

At noon, Kristy and Gerald Wilson looked at it.

At 5, they made an offer on it.

Then they put their home in Southwood on the market on April 3, a Thursday.

It sold three days later.

"A well-priced home will sell very quickly in Champaign (County) right now," said Creg McDonald, who owns the McDonald Group real-estate firm based in Champaign.

Goodbye, 2008-2011. Don't let the doorknob hit you.

The real-estate market in Champaign County, which went in the tank much the way it did across the country during the recession, is on its way back, judging by data on home sales from before, during and after.

"Two or three years ago, we could hardly sell a house," McDonald said. "It was a daily, daily grind. At some point, around 2012, we started being able to sell them again. 2013 was a little easier on us. 2014 has kind of continued that model."

"Everyone's looking to buy at the very bottom of the market," said Matt Difanis, broker-owner with RE/MAX Realty Associates in Champaign. "But you don't know it's the bottom ... until it's rebounded. It took a while for there to be a consensus that the worst has passed."

The mind-set has changed, Difanis said, from an environment that encouraged potential buyers to rent — out of concern that prices might still go down and a general unease about the economy — and encouraged sellers to make their homes available for rent, rather than allow them to sit empty.

Newcomers to town took owners up on that decision, Difanis said. When the market weakened, they "didn't want to rush into a purchase. Everybody's default setting shifted" from buying to renting.

Now? Difanis describes the buyer's mind-set: "I'm more inclined to buy now to lock in price and interest rate, rather than take a chance and then be wrong next year."

That was the case for the Wilsons.

"We were originally thinking we were going to do this next spring," said Kristy Wilson. "But with interest rates where they are, and not knowing where they'd be in a year, and with prices the way they are, we thought maybe we'd better starting thinking about doing it now."

"People felt better about the economy," said Bill Utnage, a broker with the C-U Real Estate Team at Keller Williams Realty. "Interest rates are still low.

"People realized that maybe the sky isn't falling."

Another sign? Builders are putting up spec homes, a practice that basically stopped during the recession.

"Builders with spec homes had to do whatever they had to do" to sell them during the recession, Difanis said. "Some builders went out of business."

He said dropping prices for existing homes, coupled with building-code changes that were driving prices up for new construction, drastically slowed the construction of new homes.

That slowdown has reversed. An analysis of home sales in Champaign County in 2013 shows that the busiest areas for sales — subdivisions in Mahomet, southwest Champaign and Savoy — are also the busiest areas for new construction.

Utnage notes that for the first time in several years, Champaign County builders are planning a showcase of homes.

"In 2013 and as we go into 2014, we're seeing an increase in new construction," he said, "predominantly in Savoy, and also in southwest Champaign (and) Mahomet as well.

"What we've seen more of this year is builders building spec homes. ... If they didn't truly believe they could get these homes sold, they wouldn't build them," Utnage said.

That includes more expensive homes.

"What we're seeing in Thornewood (in Mahomet) is some higher-end (houses) — I'm talking 500-plus — starting to sell," Utnage said. "We had one, to give you an example, that was sold out there that was listed at $515,000, new construction, and it sold within two weeks of going on the market."

In Prairie Fields, a busy subdivision for sales in Savoy, "we've seen people getting into multiple offers on the first day they came into the market. We haven't seen that in quite a while."

Still, sales aren't close to the levels before the recession. Numbers for 2013 are almost identical to those for 2008, which was when the real-estate decline hit.

Volume, and in many cases prices, in 2006 and 2007 were much higher.

"Those years were rockets," McDonald said. "That was the bubble getting ready to burst.

"Are we going to get to the levels of 2005 and 2006, those peak levels? I'm probably going to make every Realtor and homeowner mad with this statement: I hope we don't. Because it's what caused our problem. The availability of cash, and all those evils that allowed people with reckless abandon to buy homes caused us four or five years of great heartache, not only in real estate but in our entire country. If it's healthy and everybody's buying that way, that's fine. But you're talking about historic highs during those times. I think we're getting close to a level, at least in our market, of normalcy.

"There's 1,400-some homes on the market right now. Somewhere around 1,200, in this market, is equilibrium, where it's not a buyer's market or a seller's market."

Sections (2):News, Local
Topics (2):Economy, Housing

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