CHAMPAIGN — People unable to sell their houses often resort to renting them out, the president of the Champaign County Association of Realtors said.
Max Mitchell cites the case of a client who bought a home on South Johnson Avenue in Urbana for $114,900 in 2005.
The client listed the house — several blocks east of downtown Urbana — for $99,800 last year when tax credits were available for certain categories of home buyers.
“It didn’t sell, he took it off the market and leased it for a year,” Mitchell said.
The client decided to test the market again this spring and dropped the price to $98,000. After 92 days, the house remains unsold, and the client is seeking another tenant.
Mitchell said that’s a familiar story.
In Champaign-Urbana, the average length of time a home has been on the market is 114 days. According to Mitchell, that figure has been growing.
As of Thursday, the Champaign County Association of Realtors’ Multiple Listing Service had 2,078 active listings.
Mitchell said the number of listings topped 2,000 in early June. He said the last time there were that many listings was four years ago, in 2007.
“Sellers need to really come down (in price) if they’re serious,” Mitchell said. “Not to a price comparable to a year ago, but to a price so conservative that someone is not going to pass it up.”
Mitchell said a client who bought a condominium at The Courtyards in Savoy paid $150,000 for it in 2005. But the woman moved away and ended up leasing it out. Now that the lease is coming due, she hopes to sell.
But after doing a market study, Mitchell advised her to ask $125,000 for it. Despite the markdown, it’s still up for grabs.
Lower prices are just one factor making this an attractive market for buyers.
“Today is an excellent time to buy in the marketplace, (mortgage) rates being what they are and with the inventory there is,” Mitchell said. “There’s an ample supply in most neighborhoods.”
Buyer activity is more limited than in the past, he added.
“We’re still seeing a lot of price adjustments, with people adjusting the prices down,” he said.
But he predicted a “little swing up” in activity once the school year begins.
Sue Purkayastha and her husband have been trying to lease a house at 610 Newton Drive in Champaign’s Ashland Park subdivision for $990 a month.
They’ve been advertising the house on and off for about a year, but so far have no takers, Purkayastha said.
“I guess we’re still vacillating about whether to sell,” she said. “We thought it would be easier to rent, rather than sell, given the market in Champaign.”
The Purkayasthas, who now live in the west suburbs of Chicago, formerly lived in southwest Champaign. They bought the two-bedroom, two-bathroom house in Ashland Park as “an extra house” in 2005, in the event their kids stayed in town for school.
But that didn’t happen. A relative stayed there awhile, and the Purkayasthas continue to use it when they’re in town.
If the Purkayasthas elect to sell, the house is likely to be in a price range popular with local buyers.
Mitchell said most June sales in Champaign-Urbana tended to be in the $100,000-to-$149,999 and $150,000-to-$199,999 price ranges.
Citing statistics from Re/Max Realty Associates that categorize homes by price range, Mitchell said the selling price for Champaign-Urbana homes in June ranged from 93 percent to 99 percent of the listing price.
But Mitchell cautioned the statistic doesn’t account for previous price adjustments.