Mike Pezley said many of the people he helped to buy houses in the Quad Cities region last year spent a lot of time in a state of shock. They spent days looking at houses, offered the full list price or offered thousands of dollars over the list price – and still were outbid and […]
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Mike Pezley said many of the people he helped to buy houses in the Quad Cities region last year spent a lot of time in a state of shock.
They spent days looking at houses, offered the full list price or offered thousands of dollars over the list price – and still were outbid and did not end up with a home.
“It was a tough time for them. You can explain it to them, but it was still a little shocking when they were outbid time after time,” said Mr. Pezley, a Realtor at Re/Max Concepts in Davenport.
The 2021 housing market in the Quad Cities was a frenzy for many people. Records were broken. Many potential buyers were squeezed out by high prices. Many sellers sold their homes in just a few days at far above the list price.
And 2022 might be a repeat of last year, according to several real estate professionals across the bistate region.
Some of those professionals described last year’s housing market with these words:
“Really, really busy.”
“A different year.”
Many of the same real estate leaders said the buying frenzy of 2021 was largely fueled by a pent up demand created by the COVID-19 pandemic. People were stuck in their homes during the pandemic. During that time, they either got their homes fixed up and ready to put on the market or decided they wanted something different in a new home.
“We just had a huge demand for homes,” said Caroline Ruhl, CEO of Ruhl&Ruhl Realtors. “People wanted to change how they live.”
But Ms. Ruhl added that it was more than just a different home; it was a different type of home. Many homeowners decided they wanted to get away from the open concept floor plans. They also wanted separated home offices for the new work-at-home era. Many also many wanted swimming pools to better enjoy themselves, especially if they worried about being stuck in their homes again during another phase of the pandemic.
“They want a lifestyle change,” she said.
For many in the real estate industry, last year also brought a change in how they did business amid a pandemic.
Sharon Smith, CEO of the Quad City Area Realtors group, said the pandemic showed many people that we are “one event away from having a disruption on our lives, and that goes for real estate.”
The pandemic also forced real estate professionals to become more familiar with technology – such as virtual home tours and Zoom meetings as well as finding ways to social distance during traditional home tours, Ms. Smith added.
No matter what kind of home tours were presented, 2021 was a big year for sellers and an expensive year for buyers. Ms. Smith called the year a “feeding frenzy,” especially during the summer months. During that time, it was not uncommon for sellers to receive 15 offers on their home, and some homes sold in just a couple of days after hitting the market, she added.
Ruhl&Ruhl officials provided these 2021 company statistics:
- Average home price in the Iowa Quad Cities: $239,000 (up 6% from 2020); average price in the Illinois Quad Cities: $151,800 (also up 6%).
- Average home price in the Clinton/Camanche, Iowa, and Fulton, Illinois, area: $126,600 (up 9% from 2020).
- Average home price in Muscatine/Wilton, Iowa, area: $174,100 (up 5%).
- Homes sold in 2021: 2,904 in Iowa Quad Cities (up 7% from 2020); 2,734 in Illinois Quad Cities (up 9%).
“It really was a surprisingly strong year,” said Ms. Ruhl. “We really didn’t know what to expect going into the year.”
Housing markets throughout Iowa and Illinois also posted strong sales – and fast sales – last year.
The Iowa Association of Realtors (IAR) recently reported that the average days that a home is on market keeps dropping. The full-year average was 38 days on market. That is a 35% decrease from 2020 and a nearly 40% decrease from 2019.
“2021 hit some all-time highs in real estate despite a low number of homes on the market in most of our communities,” IAR President Byron Menke said in a news release. “Low mortgage rates and a strong buyer demand help fuel the record sales in 2021. We hope to see new construction costs stabilize and an increase in the number of new homes built in our state in 2022.”
He added: “National economists anticipate another strong year in 2022, however, conditions of a limited supply of homes and projected increase in interest rates may temper things a bit.”
Here is a look at some of key statistics in Iowa and Illinois:
Home sales in Iowa grew 5.2% in 2021 over 2020, according to IAR’s Housing Trends report. The median price last year was $195,000 compared to $180,000 in 2020.
A total of 49,157 Iowa homes sold in 2021. In comparison, 46,713 properties sold in 2020. In eight of the 12 months, there was an increase of homes sold as compared to the same month in 2020. Looking back to pre-pandemic 2019, total sales for the year amounted to 42,208.
Illinois home sales rose 11.8% and median prices rose 11.1% as homes sold quicker in 2021 compared to 2020, according to data released by Illinois Realtors.
The Illinois statewide median price in December was $244,000, up 7.3% from $227,313 in December 2020. The median is a typical market price where half the homes sold for more and half sold for less. The year-end 2021 median price reached $250,000, up 11.1% from $225,000 in 2020.
In Illinois, it took an average of 33 days to sell a home in December, down from 42 days a year ago.
Real estate professionals said that one of the main messages the public should take away from the stats is: Competition for homes is fierce.
“If you want a property, you have to be assertive and have a plan,” said Lynsey Engels, president of Real Estate Brokerage at Mel Foster Co. “Be prepared for what things you can live with and without in a new home.”
A big part of having “a plan” is getting pre-approved for a home loan before any serious quest for a new home. Potential buyers who begin a search without that loan pre-approval are often just wasting their time because other buyers looking at the same home will have that loan approval and be able to make a quick offer on the property.
“You might not get that first, second or even third house… You really need to go in aggressively,” Ms. Engels added.
Mel Foster leaders also recently released the company’s year-end real estate statistics. The company called 2021 a year “marked by unprecedented competition” for homes. The average sales price was up more than 10% from 2020 to $194,933, and the number of days on the market was 37 compared to 58 in 2020.
“Last year was a unique time in real estate. Buyers experienced skyrocketing home prices, limited inventory and a fast-paced environment,” Ms. Engels said in a statement.
Another part of being prepared in a fast-paced housing market is getting the help of real estate professionals.
“Start talking about your objectives,” Ms. Ruhl said. “Let someone start helping you through this process.”
Ms. Smith said it is also important for sellers to seek professional help from those in the real estate business. She saw times last year when a seller got 15 offers on their home. A real estate professional can help sort out all the offers and get the best deal for the buyer.
“It’s not just the money. There are so many different aspects that need to be considered,” she added.
Will the Quad Cities region’s housing market stay hot in 2022?
While the year appears to be off to a fast start, the hot housing market might depend on this question: Will mortgage interest rates continue at historic lows?
“People need to realize that these rates won’t be low like this forever,” Ms. Ruhl said.
Another issue homebuyers face in the new year is the ongoing low housing inventory. Simply put, there are a lot more buyers than homes on the market. Several real estate professionals said they have a message for people considering selling their homes: Get your home ready to sell and put it on the market. This is the best time to sell a house.
Other real estate professionals say the new year is off to a hot start and might stay hot all year because people are still in a buying mood.
“This is the strongest January we’ve seen. There are still a lot of buyers out there still looking for homes they couldn’t get last year,” added Mr. Pezley.