The housing market in Illinois in 2020 was a seller’s market, but a new study indicates that may begin to shift in 2021.
With historically low inventory, homes are being bought as soon as a seller puts it on the market. That lack of supply is also driving up prices as bidding wars break out with multiple offers on many homes.
A survey by Clever Real Estate found that of the homeowners who planned to sell in 2020 or in 2021, 65% delayed selling their home or decided not to sell altogether because of the pandemic. The reasons given included financial uncertainty, not wanting people coming in and out of their homes and not being ready to meet with a real estate agent.
“I think as we see more areas opening up and people getting back into their so-called regular daily lives, we will see inventory increase quite a bit,” said lead researcher Francesca Ortegren.
Geoffrey Hewings, director of the Regional Economics Applications Laboratory, said there are obstacles that could prevent a homeowner from putting their house on the market.
“It is a seller’s market, but inventories are so low, a homeowner may not be able to find a house they like once their house sells,” Hewings said.
Another factor hurting inventories is the price of lumber, which has tripled in the past year. Higher material prices translate into higher prices for new construction.
The high prices are not stopping some from building their dream house. Ed Neaves with Berkshire Hathaway in Bloomington, said they have 49 pending new construction homes. Two years ago, his company built 6 during the entire year.
“Inventories pretty much throughout the state are low, and as they come to market, they are being snatched up as quick as they come to market and we are seeing escalating prices,” Illinois Realtors President Sue Miller said.
The report also found that one in four Americans missed at least one mortgage or rent payment since the pandemic began. Francesca said if those homeowners did not make a deal with the bank, it could more foreclosed homes will hit the market.
“Without any kind of agreement, they’re just skipping payments because they don’t have the cash or they have to prioritize other types of debt, those people are at risk potentially for foreclosure depending on how many payments they have missed,” she said.
Those who have been making their mortgage payments are benefiting as home values continue to increase. According to the National Association of Realtors, homeowners in America collectively gained $2 trillion in home equity over the past year alone as home prices rose 16%.