Rockford real estate market remains tight, with low inventory
ROCKFORD — The number of single-family homes and condominiums for sale in the area fell for a seventh consecutive year in 2021.
Historically low inventory led to bidding wars in some cases and an increase in the number of homes on the market that sold above the original asking price.
In fact, 40% of properties purchased last year in Winnebago, Boone and Ogle counties sold above asking price, according to Rockford Area Realtors. In 2020, 23% of properties sold in the area in 2020 were above asking price.
Inventory is expected to remain tight in the new year, which means sellers will continue to have an edge over buyers, Rockford Area Realtors CEO Conor Brown said at a news conference Monday.
“There may be a slight change, not to say the market is going to cool down, but you might have a slight increase in terms of homes staying on the market longer,” Brown said. “But, as we expect inventory to start to rise, buyers may have a few more options. We still expect homes to sell very quickly, but it probably won’t be at the same frenzy that we we saw in 2021.”
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Single-family homes in the area were on the market an average of 22 days last year compared to an average of 42 days in 2020, 46 days in 2019 and 53 days in 2018.
Why are there so few houses on the market?
“I think with the pandemic people really wanted to shelter in place, but it also made a lot of people think they needed more space because they needed an extra desk or ‘they wanted a little bigger yard for the kids or pets to play in. in,” Brown said. “You pair that with people being health conscious and not wanting strangers in their home, it’s really resulted in limited choices.”
New home construction in the area is a far cry from what it was before the 2008 recession, according to Keller Williams Realty agent Jerry Gibson.
“We had two big homebuilders back then who were (each) building 350 to 400 homes a year and are probably building 30 homes each today,” Gibson said.
“When the market hit bottom, many of our builders and developers went out of business. We couldn’t get a lot of it. That, coupled with the high cost of lumber, the houses that are being built are usually high-end houses, rather than starter houses or even moderate houses,” he said.
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Interest rates – at historic lows at the start of 2021 – are starting to rise slightly. The interest rate on a 30-year fixed rate mortgage has risen about half a point over the past year to 3.22%.
“The market is going to be tough again this year for buyers,” said Maurer Real Estate Group agent Natalie Mulhall. “But I think with patience and a bit of due diligence, it’s doable.”