O'Fallon is the only major city in the metro-east where housing values didn't drop during the recession, according to new statistics from the U.S. Census Bureau.
The Bureau estimates home values in Alton, Belleville, Collinsville, East St. Louis, Edwardsville and Granite City significantly dropped during the Great Recession, defined as the period from 2007-09. Cities with populations less than 20,000 residents were not included in the figures released Thursday.
The estimates compare three-year surveys of those communities during the recession and post-recession period of 2010-12.
The bureau also released numbers comparing home ownership during the same periods. While the home ownership rates in other surveyed cities were not significantly changed, home ownership in Alton dropped more than 7 percent during the recession. Conversely, the percentage of those renting property in the city rose 7 percent in Madison County's second-largest city, according to the bureau.
The housing estimates and home ownership rates are two of more than 40 categories of social and economic factors in cities, counties, states and nationwide collected by the bureau and released periodically.
In St. Clair and Madison counties, the bureau estimates about 3,200 fewer people own homes than they did before the recession, despite record low interest rates.
While median home values increased about $900 in Madison County, home values in St. Clair County dropped $300.
Al Suguitan, president of the Greater Gateway Association of Realtors, said the number of local homes sold has increased each year since 2010 but the median price of homes has not "gone up in harmony" with the additional sales.
"Price are increasingly getting back to where they would be in a normal market. Based on the numbers from the federal government and independent analysts, the median appreciation rate across the country was about 3 percent a year. What happened with the bubble is we went way above with the median appreciation rate nationwide. In some areas the rate was in the double digits," Suguitan said.
"When the bubble burst, the higher values dropped precipitously. Those who purchased a home in 2005, 2006 and 2007 felt the brunt of that deflation. Now market prices are coming back."
While home values fell elsewhere, the Bureau estimates the median home value in O'Fallon rose $11,600 -- from $194,300 to $205,900 per home. Nationally, the median home value dropped from $191,900 to $174,600.
Two O'Fallon real estate brokers said the strong reputation of the city's schools and close proximity to the region's largest employer, Scott Air Force Base, have helped protect the O'Fallon housing market.
Susan Holden, owner of RE/MAX Preferred in Swansea and O'Fallon, said it has been a "really, really good year" for the real estate market in O'Fallon.
"We just didn't see the huge fall that some of the surrounding communities did," Holden said. "While home prices haven't been appreciating by leaps and bounds, they have remained somewhat stable and had a little growth. It's been an interesting little pocket of real estate, which just goes to show O'Fallon is a good investment."
Rob Cole, a broker with Judy Dempcy Homes in O'Fallon, said the company had one of its best years since 2006 and homebuyers look to O'Fallon as a family-oriented town.
High rental prices are allowing some current homeowners in O'Fallon to become investors in rental property instead of selling their home for a loss, Cole added.
"Plus, builders are starting to tailor towards homes that are affordable in O'Fallon," Cole said. "They are not building $500,000-plus homes. The majority of builders are recreating the wheel by building something more affordable, able to hold its value. What has been hit hardest in Southern Illinois is the $500,000-plus homes."
Median home values in Edwardsville, Belleville and East St. Louis endured the heaviest losses during the recession, including declines of:
* $8,600 in Edwardsville, from $196,400 to $187,800.
* $6,400 in Belleville, from $109,500 to $103,100.
* $6,300 in East St. Louis (nearly 10 percent), from $64,000 to $57,700.
Suguitan said home buyers are feeling more optimistic about the economy and the pent up demand of renters looking to take advantage of low-interest home loans has him optimistic about home sales in 2014.
"Even with everything else swirling around us, the Affordable Healthcare Act fiasco, gridlock in Washington, lack of harmony in the state capitol, general malaise of what Illinois is going to do with the pension problem, people are confident enough to invest in new houses. Just not to the great degree we would like them to," Suguitan said.
Contact reporter Daniel Kelley at firstname.lastname@example.org or 618-239-2501.