Last year proved expensive for metro-east homebuyers. Will the market improve in 2024?
Home prices were up and inventory was down across most of the U.S. last year, and the metro-east was no exception. But a more balanced market could be on its way in southwestern Illinois.
“We have definitely seen prices go up in the past several years,” Summer Penet, Columbia-based Realtor and team manager of “The Red Team” with Re/Max Results Realty, told the News Democrat. “I don’t anticipate that it’s going to drop significantly, I think we’re just going to see more of a leveling off, which would be healthier for the market overall.”
Belleville home values are up 5.6% from December 2022 to December 2023, according to popular home site Zillow, and real estate company Realtor.com reports median listing prices are up 9% in the city.
Here’s what to know about the local real estate market and what one agent expects in 2024.
What to know about the metro-east’s market
The last several years have seen a seller’s market locally and in many communities across the U.S., and Penet said metro-east buyers were under pressure to make concessions in order to craft appealing offers.
“So it kind of put the buyers in a tough spot during that market to find a home because there was limited inventory and then also to compete with all of those offers and having the pressure to write an offer, waive inspections, waive appraisals,” Penet said.
But mortgage interest rates are expected to ease at least somewhat in 2024, and buyers are returning to the table with less pressure to compete with other offers. Metro-east buyers aren’t waiving inspections and appraisals as frequently as they were a couple of years ago, Penet said, but they can still expect some competition in 2024 as people look to buy with interest rates less than 7%.
The home supply is still not sufficient to keep up with demand statwide, according to a Dec. 20 report from the Illinois Realtors association, leading to a 10.1% statewide drop in home sales from November 2022 to November 2023.
Penet said she does not expect the inventory problem to resolve in the foreseeable future in southwestern Illinois.
Home prices are up 9.5% across the state from 2022 to 2023, the Illinois Realtors association reports, but the list to sales price ratio has become more balanced locally, Penet noted.
“Now it’s trending where somebody’s not paying significantly above listing price,” Penet continued. “Even though the rates are high, it kind of balances itself out.”
Neighborhood home values tend to increase across the board when buyers pay above list and a home appraises, Penet said.
The number of days a typical metro-east home stays on the market hasn’t changed too much over the last year, Penet said, hovering around 30 to 35 days on average. Luxury homes may take longer to sell.
Tips for buyers and sellers
One of the most important things buyers can do is to use an agent who can evaluate multiple strategies, such as waiving appraisals or inspections or covering any appraisal gap, to determine what makes the most sense for a particular situation, Penet said. This is especially important when sellers are considering multiple offers.
Buyers working with real estate agents may also benefit from learning about homes before they’re posted on the market, giving them a head start to work on an offer.
While Belleville is still considered a seller’s market, it’s vital for sellers to price their homes appropriately from the get-go, Penet said. The sellers’ advantage in the past few years has led some to overprice, and buyers may be suspicious of properties that sit on the market for much longer than what’s typical.
In addition to working with an agent who researches to find the best price point to begin at, Penet said it’s also a good idea to make sure your home is in good condition before listing and consider doing a pre-inspection.
Sellers looking to evaluate home values in their area to accurately price their home may find some helpful data online from the Federal Housing Finance Agency.
