If you’ve tried to buy a home recently in Bloomington-Normal, you already know that it’s a sellers’ market. But there are signs that demand from buyers is softening – even as prices keep climbing.
The number of existing homes sold in Bloomington-Normal in the first nine months of 2025 was down 1.4% from the year before, and well below the flurry of activity seen during COVID, according to the latest data from the Mid-Illinois Realtors Association [MIRA]. There simply aren’t that many homes on the market right now, and that low inventory has helped drive up prices.
It cost around $213,859 on average to buy an existing home in 2021. Now, it’s $287,107. That’s a 34% increase in just five years.
“What we are seeing is, with fewer houses available, a lot of buyers right now are getting discouraged and exiting the market,” said Dawn Peters, a Realtor with Keller Williams. “And so the demand is softening a little bit while the supply still remains low. Prices are still holding because of that.”
There are many other potential reasons that demand is flattening. Rivian’s big hiring spree appears to be over. Those frustrated by the lack of options in town may have already bought something in one of the surrounding smaller communities in McLean County. Uncertainty about the economy may also be freezing people in place.
“It’s a little weird. Inventory is low, and buyers have kind of slowed down a little bit with the state of the world and economy that we're in, and so moving a little slower than we've seen in the last several years,” Peters said.
Relatively high interest rates are another important driver. Melanie Walker with Coldwell Banker, president of MIRA, said those interest rates are keeping inventory down. If your interest rate on your current home is 3.5%, you may not be too eager to sell if that means you're then buying another home at today’s 6% rate.
“It’s been kind of tricky. People coming in obviously are buying. But if the local market that needs to be listing isn’t [listing] because of interest rates – Where are they gonna go? What are they gonna get? – then it’s a Catch-22 kind of,” Walker said.
But interest rates are starting to decrease; the Federal Reserve just cut its benchmark interest rate by a quarter percentage point Wednesday. That could create more inventory in the market.
“Personally, I think people are sitting on the fence, watching interest rates,” Walker said.
Thomas Yoder, a Realtor with RE/MAX Rising, said the last thing he would want for any of his clients is for them to be “house broke” or rush housing decisions.
“But I really try to caution making the interest rate the only reason why you're not buying a house,” Yoder said. “It's a big factor, but ultimately, you can do things with local lenders to refinance at a certain point if the rates go down, there's a chance.”
Bloomington-Normal has made little progress building more housing inventory in the past few years, including single-family homes. Sales of newly built homes – a smaller part of the broader housing market – are down 44% so far this year compared to 2024, which itself was a down year.
Advice for buyers
So, it remains a sellers’ market, but there are things buyers can do to improve their odds of getting the house they want.
“As a buyer, you gotta be a little strategic. It’s not impossible, but you’ve gotta be strategic,” said Yoder.
Yoder said, if you’re able, cash offers are usually the smartest and most reliable way to make a strong offer. Walker has seen something similar.
“I’ve been in the business for 25 years, and I’ve never seen a market like this before. There are so many cash buyers, and the demand is so great. We’re still seeing multiple offers in some price ranges. For $350,000 and above, we’re not seeing quite as many. But under that, yes, homes $200,000 or $175,000 and below, they typically sell very quickly,” Walker said.
Most people will borrow to buy. Using a local lender can be advantageous, said Yoder. He said local lenders are beneficial because not only is communication faster and more efficient, but local lenders tend to know more about the specific area you are hoping to move into.
It may also help to be flexible on location – even a willingness to look for a home in a smaller town just outside of Bloomington-Normal. Peters said one of the biggest changes since COVID has been buyers are a “lot less picky about location.”
“Before where a buyer may say, ‘I want to be in this specific neighborhood,’ or ‘I want to be in Bloomington-Normal city proper,’ they have expanded. Many buyers have expanded their search range out to different neighborhoods or the smaller surrounding towns because they're not finding what they want in town,” Peters said.
