(The Center Square) – With housing inventories low and prices still on the rise, a survey shows people are down on the current real estate market.
Clever Real Estate’s poll shows people are 78% more pessimistic about the housing market than they were a year ago. Only 44% said now is a good time to buy a home, compared to 69% in April 2021.
There is a severe lack of inventory in Illinois, so homes don’t stay on the market for very long and sellers are getting offers that are thousands of dollars over the list price. According to Illinois Realtors, the average Illinois home sold in 41 days in February compared to 52 days in February 2021.
“For folks that are buying, it is increasingly becoming unattainable to purchase a home,” said Clever Real Estate spokesperson Danetha Doe. “Right now we are nearing a median home price of $400,000 across the United States.”
The median price is up to $240,000 in Illinois, a 6.4% increase compared to this time last year.
The survey shows an increase in people listing their homes for sale this year. Doe said that should help low inventories, which were down 34% in Illinois in February compared to last year.
“We did find that sellers that had postponed their property in 2021 will be listing their properties in 2022, so that will increase inventories,” Doe said.
New construction would also increase inventories, but it has been slow going in Illinois. Residential construction permits per capita grew by 10.6% in the state, which ranked 48th in the country.
A rise in interest rates is another wrinkle in the market. When interest rates drop, it encourages more investors to enter the real estate market because they risk less of their own cash to do so. However, when rates rise as they are expected to continue to do this year, this will most likely drive away investing and general home buying as borrowing becomes more expensive.
But higher interest rates may actually be a good thing for home prices.
“Low rates make housing less affordable in the long run and rates have been on a long downward trend,” Jonathon Miller, CEO of real estate firm Miller Samuel Inc., wrote in a recent blog post.
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