The Central Illinois real estate market remains extremely healthy. Buyer confidence has been increasingly strong and interest rates remain low. The average interest rate in 1977 was 8.85 percent while the average in 1987 was 10.21 percent. Interest rates have continued to decrease over the past 30 years, and the average for 2017 is 4.01 percent. What does this mean? A monthly principal and interest payment in 1977 for a mortgage of $100,000 would be $715. Today, the same loan would have a monthly payment of $382. This amounts to a $333 per month savings. The cost of borrowing money for today’s first time home buyers is considerably less expensive than it was for their parent’s first purchase.
In Central Illinois, 3,031 residential properties were sold through the Champaign County Multiple Listing Service in 2017, grossing over $500,000,000 in real estate sales. The median price in Central Illinois was $150,000- an increase from the year prior at $145,000. Prior to this, 2,787 residential properties were sold in Central Illinois in 2016. With an 8.75 percent increase in number of homes sold, 3.5 percent median sales price increase and interest rates remaining historically low at around 3.5 to 4.25 percent, homeowners and real estate investors should consider Central Illinois to be a safe investment – well, as safe as investments can be.
Central Illinois offers a vast array of amenities that make the area a fantastic place to call home. Central Illinois is considered a top 10 green city*, and a top 10 tech city**. We house one of the world’s largest research universities at the University of Illinois; a leading university-based performing arts center, Krannert; and one of the nation’s most elite public high schools in University of Illinois High School, which is ranked 69 out of 17,867 high schools nationally.* We offer a nationally ranked public transit systems- the MTD- and many of those buses are now hybrid! One of the world’s largest libraries is located right here in Central Illinois. Yearly, we feature an international film festival, Ebertfest; and the Illinois Marathon which draws over 15,000 runners. Award winning restaurants, fun bars and dance clubs, multiple movie theaters, award-winning parks make Central Illinois a home where you will never run out of something engaging.
The UI is the one important reason our entire community thrives the way it does. It creates a stable yet revolving housing demand. With over 89,000 students and more than 13,500 faculty and staff members, turnover of these residents is inevitable but welcomed. This turnover contributes to our stable and solid continuous growth and value appreciation.
-2018 will exhibit similar growth and appreciation, with a 7 to 10 percent increase in number of homes sold and a 3 to 4.5 percent median sales price increase.
-Interest rates will slowly increase in 2018 but will remain low at 3.75 to 4.5 percent.
- With the new GOP Tax bill, investment/rental purchases may decline with the restriction to only deduct up to $10,000 of property tax or income and sales tax. Investors will get creative with structuring entities to increase tax savings.
-When thinking about buying, selling, or investing in real estate, it is critically important to partner with an experienced real estate professional that will guide you through the process and explain things along the way – every question you have should be completely answered to your satisfaction. The industry landscape can be daunting and confusing without help from an expert. A good realtor will have additional resources available which will help you save time and money on a home purchase or sale.
-If selling in 2018, make sure you have a competent real estate attorney and tax accountant to help you navigate the changes in the Tax Plan that may impact your profit or loss.
-Whenever buying a home, shop around for a lender. Interest rates will be virtually identical from lender to lender, but be sure to compare annual percentage rates. The APR includes all fees and costs, and comparing this number will be a true apples to apples comparison.
-If considering a purchase as a first time home buyer, speak with the city, village, or municipality you intend to buy in. You may qualify for grants or programs that can help with down-payment or home improvements. These programs can provide funds or improvements exceeding $25,000.
PJ Trautman is co-owner of Champaign County Realty, LLC, Champaign County Realty Property Management, LLC, and Appraisals By Trautman, LLC. Trautman is a realtor member of the Champaign County Association of Realtors. Trautman is a Central Illinois Business Magazine Forty under 40 in 2017 alumnus, was featured in Top Agent magazine, and received the Champaign Association of Realtor Affiliate choice award. He can be reached at email@example.com.