Effingham Area Real Estate News— November, 2008
by Terry Youngblood, Realtor Phone: 217.246.4663
Website: www.TLyoungblood.com Email: terry@effinghamhomes.com
Professional Advantage Realtors, Effingham, IL Phone 217.342.4050
Considering what’s happening in the world wide financial markets… I thought YOU may be interested in how it’s affected the Effingham, IL Real Estate Market?
Compared to a year ago (Jan thru Sep 2007):
-The number of sales are up in the under $130,000 price range.
-The $130,000 to $250,000 range is down marginally.
-The $250,000 and up range is down about 60%.
-Outlying communities sales are down more than in town.
-The number of Lake Sara sales are down.
The increased demand in the under $130,000 range is fueled somewhat by the $7500 tax credit that is available to first time home buyers. Also, some of those have been foreclosures, or near foreclosures, that have sold at discounts, which have made them attractive buys. And the constant fact, that there are more buyers who can afford that price range than higher price ranges.
The over $250,000 price range has stalled due to “preference” buyers sitting on the sidelines. “Preference Buyers” are those who have a home already, but would like to move up to a bigger home, or down size to a smaller home. With the present atmosphere, those buyers, and sellers, have elected stay where they are for now and “wait and see what happens”.
Non-prime Lake Sara sales are down. Properties that do not have excellent water view and depth are not selling as quickly as they were a year ago. However, three (3) prime lake properties have sold, or are pending sale, recently for approximately $530,000; $750,000; and $917,000.
The lake has become somewhat of a second, or third home market. Many buyers have been investors and retirees. Many of those prospective buyers looking to invest in lake property have seen significant losses in the stock market and other investments. Many who were planning to retire to the lake shortly, are reconsidering their time frame now. Thus, the number of potential buyers has dropped and the number of sales are down. Now is a good time to buy lake property.
Surrounding communities appear to have more lagging sales than in Effingham. That can be attributed to many things. However, it is likely that many potential buyers who work in Effingham daily, prefer to not spend the additional dollars required for gas. If commuting would cost them another $100 per month, they can buy a house in Effingham and save the time of driving. Now that gas prices have reduced that trend should slow.
NOW is an excellent buying opportunity for those who are financially able…especially for rental (income producing) properties. A good buy can be made in this market and the future demand for rentals looks very promising. Why? Obtaining a mortgage will become more difficult in the future. However, people will still have to have a place to live. Thus, there will be an abundance of those wanting to rent. We have also seen an increase in people looking to rent rather than commute to Effingham from their residences in towns 20 + miles away. A rental property with positive, or breakeven, cash flow can be paid for in 15 yrs…with the income paying for it. There are tax benefits to owning rental property. And you gain significant equity that you can borrow against in the future if you want.
However, investing in real estate is a long-term investment and should not be expected to reap windfall profits in a short time frame.
Outlook:
We have all experienced a definite pull back from the robust economy of the past few years. However, there are many positive signs of a bright future.
- Gas prices are down.
- The elections are over.
- St Anthony’s Hospital continues to grow into a major regional medical center, creating more jobs.
- The FedEx Distribution Center will be operational in a few short months, creating new jobs, home buyers, and retail sales.
- Our local banks are sound and ready to lend to qualified buyers.
- The national and international stock markets are improving.
- 94% plus of the workforce in Effingham County are employed.
Keep in mind that we, rural Illinois, are generally the last to enter an economic slump and the last to come out of one. We are now hearing of significant increases in home sales in the severely slumping markets. That is good news for us, too. It means the upturn locally is closer.
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