BLOOMINGTON-NORMAL, Ill. (WMBD) — As inflation, rising interest rates and a possible recession loom for the American economy, realtors are left keeping an eye on home sale trends.
In Bloomington-Normal, there’s been a shortage of housing in recent years due to increased movement into the community. This is mainly thanks to growing companies like Rivian for example.
But in the past few months, local realtor B.J. Armstrong, operating principal at Keller Williams Revolution, said the demand for housing is slowing a tad. Armstrong said there’s been a greater inventory of new construction homes on the market.
“There were roughly two houses, new construction houses for sale in February, there’s about 14 now. So to watch inventory come on the market tells us there’s something going on with demand,” Armstrong said.
Right now the mortgage rate is around 5% according to Armstrong and construction costs are higher than ever for new construction homes.
“That’s (5%) not historically high and yet buyers that are out there get a little more timid with what we’re going to buy,” Armstrong said.
Armstrong said the demand for housing is still there. However, existing home sales are also down a tad from recent months.
“We’re watching days on market up to about 14 days on the market on average, that’s moved from about four, so that’s still really, really fast,” Armstrong said.
He said right now, it’s too soon to call it a trend, but believes indications show the market will continue to slow down in the coming months.
“Of course interest rates, the Fed increased interest rates yesterday, so that’s going to add some negative pressure,” Armstrong said. “And then seasonality is going to show up for us because typically as we get into school season, that’s going slow us down a bit too.”
In Normal, the town said it issued around 50% more residential building permits in 2022 compared to 2021.
“Year to date we’re at about 83 permits and last year we were at 50 about this time,” said city manager, Pam Reece.
Reece said most of those permits have been for detached, single-family homes. She said there’s a shortage of all housing types in Normal.
“We are having conversations with developers about other types of housing stock. Townhomes, apartment units, things like that,” Reece said.