CHAMPAIGN - Lorraine and Ed Hehmann thought it would take a month, maybe two, to sell their 1,900-square-foot home in Champaign's Lincolnshire neighborhood.
They listed it on May 2. Two days later, it sold at an open house. For the next three days, interested buyers continued to call with potential offers.
The stunned Hehmanns got their asking price, somewhere between $140,000 and $150,000. Lorraine Hehmann said she has seen a number of other houses sell even before the "For Sale" sign goes up.
"It certainly is a seller's market," she said recently. "Homes all over are being sold as fast as they go on the market."
Low interest rates are fueling a buying spree this spring, the start of the real-estate busy season, and that translates into higher prices and quick sales.
Median home prices in the Champaign-Urbana-Rantoul area shot up 17.7 percent in the first quarter of 2003, the 13th-highest growth rate among U.S. cities, according to the latest survey by the National Association of Realtors. The median price rose from $95,100 in the first quarter of 2002 to $111,900 this year, the study said.
Nationwide, home prices jumped 7 percent, with the median sales price for existing family homes hitting $161,500. Thirty-one of 117 markets had double-digit increases.
Philadelphia topped the list, with the median price jumping 25.7 percent to $153,400.
In terms of a percentage in-crease, Champaign-Urbana finished ahead of a number of pricey areas on the east and west coasts, including Los An-geles, Miami and New York/ New Jersey/Long Island.
Champaign-Urbana also was the highest-ranking metropolitan area in Illinois, ahead of Springfield (26th), Chicago (28th) and Rockford (29th).
"Prices are going up, and things are selling quickly," said Diane Collins of Re/Max Realty in Champaign.
Economists with the National Association of Realtors expect the price appreciation to continue for at least another year if interest rates remain low.
Low interest rates make higher-priced houses more affordable in terms of monthly mortgage payments. They also create a shortage of properties on the market: What's available sells fast, and what might have been available is fixed up and kept by its current owners.
In Champaign-Urbana, the university's presence is also a factor, drawing employees from parts of the country where homes cost much more.
"People come from the East Coast and the West Coast, and they think they're getting a steal," said Pam Borowski, president of the Champaign County Association of Realtors.
But the market is also strong at lower price ranges, with multiple offers common for all but the most expensive homes, Collins said.
"Any house under $120,000 that goes on the market in Champaign-Urbana this time of year isn't going to last very long," Borowski agreed. "That's a high-demand price range, and they're few and far between."
Borowski, who works for Coldwell Banker Devonshire Realty, recalled a small brick ranch house on Bradley Avenue she sold even before she completed the listing. She was at the home signing the final papers, and another Realtor who recognized her car stopped in with his client to say they wanted the house.
"He was writing up the offer before I even had the listing signed. That's how quickly they are buying if it's a good house," she said.
Another factor: Out-of-town investors are buying up residential property for their children to live in while attending the University of Illinois, rather than shelling out money for rent or room and board.
"It's a good investment for Mom and Dad. They buy the house, and four or five years later it has appreciated to where they can sell it and still come out fine," Collins said. "Now that interest rates are low, it's a great time to invest in real estate."
Collins just helped Sharon and Richard Clark of suburban Chicago buy an Urbana house for their son John to live in when he transfers to the UI next fall. The seller had four other offers, including one above the listing price that came in after theirs.
Sharon Clark said she was surprised by home prices, even though she's accustomed to the sky-high real estate market in suburban Chicago.
"I think they're high, compared to the age of the home," said Clark, who has also been shopping for investment property in other states.
"We were looking at it as an investment, an opportunity to give John a chance to put some money toward the future, plus giving us the benefit of a tax write-off," she said. "We're basically in a financial position where we can do it."
Sharon Clark is a manager for a telecommunications company, and her husband is a mechanical engineer for a manufacturing company. Their two older children have already graduated from college. The Clarks also may retire in Champaign-Urbana someday.
"This was an opportunity to kill two birds with one stone," she said.
You can reach Julie Wurth at (217) 351-5226 or via e-mail at email@example.com .