Single-family housing starts grew in Normal last year by nearly 49% — though the total number only reached 55.
Construction of duplexes, or single-family attached housing, rose more — by 63%. The total number of duplexes was lower than for single-family houses, however, at 31, according to town records.
The numbers compare favorably to single-family construction in Bloomington last year, but are similarly tepid in absolute terms. The slow pace of new construction also showed up in home sales. Multifamily building permits declined in Normal last year.
Persistent mortgage rates in the high 6% range and high building costs since the pandemic have hindered construction and sales. Mayor Chris Koos said he doubts anything will change the cost/interest rate calculus in the next year because a lot of people have loans that are relatively low.
“Facing the higher interest rates we have right now is causing them to sit tight," said Koos. "I would put myself in that position. It's not a good time to sell your house unless you have to, or it's something you really, really want to do.”
Compounding the basic interest rate barrier effect is the fact that lower interest rates coming out of the pandemic to stimulate the economy resulted in a bulge of home renovations and loan refinancing.
“It’s the golden handcuffs effect. I wouldn’t want to go out and buy a new house and pay 7% when I’m here at 2.5% or 3%,” said Realtor Ed Neaves, managing broker for Berkshire Hathaway Home Services in Bloomington.
And during a recent real estate development conference offered by the Bloomington-Normal Economic Development Council, council CEO Patrick Hoban said that limits growth in the community — now and in the future.
“If you can't afford to buy a house, you definitely can't afford to have a kid, so we have to have more affordable housing," said Hoban.
Neaves said housing supply is in a crisis that started accumulating with the home mortgage recession 18 years ago when construction first ebbed.
“The construction companies, I remember one of the biggest excavators in McLean County had 350 people before the crash, and within two years they were gone,” he said.
It has not come back.
Town of Normal records show there are 283 platted lots available for construction in the town if interest rates and costs decline enough to stimulate new construction.
- 34: Blackstone 3rd-5th additions — detached single-family
- 10: Evergreen Villas — attached single-family
- 68: Greystone 2nd-5th additions — detached and attached single-family
- 39: Heather Ridge 6th addition — detached single-family
- 8: Kelly Glen— detached and attached single-family
- 22: North Bridge — detached single-family
- 19: Pheasant Ridge — detached and attached single-family
- 8: Prairie Gardens Planned Unit Development [PUD]— attached single-family
- 30: Shelbourne PUD — multifamily
- 4: Silver Oaks Estates 1st addition — detached single-family
- 28: Trails on Sunset Lake 3rd addition — detached single-family [17]; attached [20]
- 10: Vineyards 11th addition — detached single-family
- 3: Weldon Reserve 2nd addition — detached single-family [34] – attached single-family [30]
The town said there are 1,467 residential lots remaining to be final platted in active preliminary subdivisions and PUDs.
