(The Center Square) – The red-hot Illinois real estate market is showing no signs of slowing down.
With the current Illinois housing market, it is all about supply and demand. Low inventories have led to high selling prices and bidding wars.
“Based on everything we see at the state level and national that the momentum will continue,” said Ed Neaves, the 2020 president of Illinois Realtors. “It has not peaked. Part of the reason is the low inventory and all of the other factors that are contributing to that are not changing.”
According to Illinois Realtors, statewide home sales in May totaled 17,675, an increase of 51.8% from May 2020.
The statewide median price in May was $262,000, up 21.8% from May 2020. The median is a typical market price where half of the homes sold for more and half sold for less.
Geoffrey Hewings, emeritus director of the Regional Economics Applications Laboratory at the University of Illinois, says newly built homes may eventually help with the inventory situation.
“It is going to take a while before we see a significant contribution from new construction to add to the inventory and therefore reduce some of the pressure," Hewings said.
There are some Illinois housing markets that could turn ugly. With the pandemic housing boom and low mortgage rates, signs of weakness can jump out, including a slowdown in buying if prices continue to rise in some places.
GOBankingRates cites the Chicago suburb of Naperville, which frequently makes “best places to live” lists. Home prices have dropped more than 2% over the past two years. And at 26.4%, Naperville has the highest percentage of listed homes with price cuts than most cities. Plainfield was close behind.
The website also said Champaign is showing signs of weakness. The growth in home prices has been slowing. Houses spend more days on the market in Champaign than they do nationwide, and both the foreclosure rate and percentage of homes underwater are higher than the national rate.
GoBankingRates said Peoria claims the top spot among cities with real estate markets that are going south. The central Illinois city has seen a big drop in home prices over the past two years (-15.9%), the percentage of underwater mortgages is more than double the national rate, and the foreclosure rate is high.
For most of Illinois, it remains a seller’s market.
This year’s moving season has started out bright for sellers with their homes being purchased at top prices,” said Sue Miller, president of Illinois Realtors. “But the future remains overcast for those trying to purchase their dream homes due to continued record low inventory of available housing of all types.”