Southern Illinois Housing Markets Remain Strong
It didn’t take Teena Stults long to find the right house for the right price, after meeting with her real estate agent Wednesday afternoon to discuss buying the house, located in Collinsville, Ill.
“I like how big the rooms are, how open it is,” Stults said to the Belleville News-Democrat after walking around the two-story home on South Street. “It feels like you have more freedom, everything is not on top of each other.”
Stults said she was able to find a house, reasonably priced, after looking for only two months. Her real estate agent, Heather Horvath of Hoffmann Realtors in Collinsville, said that Stults and other home buyers are in a good position.
“I think home prices are pretty much holding and are stable in this area, as far as sales go right now,” Horvath said. “You definitely have more to choose from in this market. There are a lot of nice listings out there right now.”
Earlier this week, the National Association of Realtors reported that sales of existing homes throughout the United States fell by 8.4 percent in March, the largest month-to-month decline since January 1989.
Numbers reported by the local sectors aren’t as dire. According to the Greater Gateway Association of Realtors, which covers Madison, Bond, Macoupin, Jersey and Calhoun counties, 1,110 sales - or 46 fewer - were reported than a year ago.
The association also revealed that the neighboring Real Estate Association of Southern Illinois, which covers St. Clair, Monroe, Clinton and Randolph counties, had 748 sales in first quarter of ‘07 and 836 in that span in ‘06 - or 88 fewer.
Home Builders Association of Greater Southwest Illinois Executive Director Jerry Rombach said local market declines are modest, as lower Illinois mortgage costs continue to fuel demand for homes.
“The [Illinois housing market] is not seeing the declines as we’ve seen in other hot housing sectors in Phoenix, Florida, California or Las Vegas,” Rombach said.
“I’m hearing a lot of comments from those that staff and sit at display homes and sales people of builders who are telling us that the traffic is beginning to pick up considerably,” Rombach added.
“The message is that a lot of the problems with the present housing market have really been a little exaggerated by the national media, and the word may not be getting out locally that in the Greater St. Louis area, mortgage interest rates are still at low levels and product is more available.”
Subprime (or bad credit mortgage) lending, a practice that became more common when the nation’s housing market reached record heights within the past few years, has been blamed for the national market’s fall.
Subprime lenders provide home loans to borrowers with low incomes or weak credit to get mortgages with higher-than-usual interest rates that are typically adjustable every 12 months.
However, some reported rates jumping as much as 50 percent to levels some borrowers cannot afford and have caused record foreclosures throughout the country. What about Illinois?
Greater Gateway Association of Realtors executive director Al Suguitan said that lenders are always going to devise ways of helping people get into houses, but there are always going to be some people who probably should not have been granted a home loan.
“I would say that after the fact, when they’re doing the post-mortem or the forensic analysis on what went wrong with the subprime market, they will point out that some lenders lent money out and shouldn’t have, but both lenders and mortgage brokers have to take risks,” Suguitan said.
“That is why they have to have such strong underwriting standards.”
“I think that some of them realize that lending standards were a little lenient during the boom and are tightening them up,” Horvath said.
“But a mortgage is still reasonably easy to get.”
Horvath also said the local market continues to attract buyers with its proximity to St. Louis, large inventories and low interest rates.
“I think our area is okay,” she said. “I don’t think we’ve seen the recession most areas in the nation have seen. We do have a lot of good listings on the market and pretty good buyer clients right now.”
SOURCE: Belleville News-Democrat