Like many couples who decide to buy their first house, Shelby Dietz and her boyfriend, Drew Ison, were sick of throwing away their money on rent.
Now in their mid-20s, secure in their jobs at ISU, and ready to build some equity in a starter home, Dietz and Ison were eager to buy in Bloomington-Normal. But they ran into an unexpected problem: There weren’t a lot of options.
After seeing some duds, Dietz and Ison finally found a house in Normal that checked a lot of their boxes: close to ISU, big backyard for their dog, and not a fixer-upper. So they had to move fast. Just a few hours after the home came onto the market, they made an offer.
“It was about an hour and a half after we looked at it,” Ison said.
“We knew we had to make the offer quick,” Dietz added. “For our price range, we felt it was a little scarce. Especially for not wanting a complete fixer-upper. On the lower end of the price range, it was definitely hard to find one that was a safe and reliable investment.”
Existing home sales are steady in Bloomington-Normal, continuing a rebound from the long post-recession recovery. Total sales are up around 1.4 percent in the first six months of 2017 versus the same period in 2016, and the average home-sale price (around $167,800) is up 4.5 percent, according to data from the Bloomington-Normal Association of Realtors (BNAR).
The challenge right now is low inventory. There are only around 1,080 homes on the market, down 10 percent from a year ago, BNAR data show. There were 1,600 homes on the market at this time in 2013.
Low inventory means fewer options for buyers in lower price ranges, like Dietz and Ison. There are around three months of inventory—meaning it would take just three months to sell everything on the market—in the $100,000-$150,000 range, as well as the $200,000-$250,000 range, BNAR data show.
There are many reasons for the low inventory, said BNAR President Ed Neaves, who is managing broker at Berkshire Hathaway HomeServices Snyder Real Estate.
Those who still own their more affordable starter homes are staying longer, due to student loan debt, job uncertainty, flat incomes, or other financial pressures, Neaves said. That means they’re not “moving up” to a home closer to that $200,000 price range, disrupting the usual flow of the market, he said.
Like other markets, Bloomington-Normal saw many distressed homes purchased by investors who’ve kept them as rentals, Neaves said. Renters are inclined to keep renting to save up money.
And those who are ready to buy are aided by near-historic interest rates.
“The whole thing is like a self-fulfilling prophecy,” he said. “All of these things are piling up on each other.”
While super-fast offers are not the norm, they are happening, Neaves said. One recent listing sold in just six hours, he said, with cars lined up filled with buyers looking to see it.
“Inventory is a problem, but if a house is properly priced and in good condition, on average it’ll last about 44 days—the ones that have closed,” Neaves said.
Sales of new homes continue to struggle. The 76 sales so far this year are down 7.3 percent from that same period in 2016, which was a down year on its own, according to BNAR data.
The bulk of sales in Bloomington-Normal are existing homes—outnumbering new construction sales 17-to-1. First-time buyers like Dietz and Ison are a big reason for that.
“Buying a house is pretty strenuous,” Ison said. “There’s a little bit of a learning process for us, but it’s something almost everybody has to do. Getting it done early (in our 20s), we feel more prepared for our second or third house (later in life).”
Here’s a look at existing home sales in Bloomington-Normal in 2016-2017:
WGLT depends on financial support from users to bring you stories and interviews like this one. As someone who values experienced, knowledgeable, and award-winning journalists covering meaningful stories in central Illinois, please consider making a contribution.