While other regions around the country have returned to normalcy after the housing crisis, the Midwest has been a bit slow to recover and the region has lagged behind the majority of the country when it comes to home sales. But according to realtor.com, that is about to change.
Overall, this spring sales season is projected to be the busiest one since 2006 thanks to pent-up demand and low mortgage rates. The stock market’s return to regularity has helped as well. And while sales are expected to be strong on the whole, the Midwest might be the tip of the spear.
Realtor.com ranked each of the country’s four regions on an index where a score of 100 was equivalent to about 5 million homes under contract over the course of a full year. The Midwest scored a 119.6 on that scale, which equals a 61.4 percent jump in homes under contract compared to January and a 7.2 percent uptick from the previous year.
In the Midwest, especially in cities like Omaha, demand is through the roof and supply is nowhere near able to keep up. Many homes will be on the market only for a matter of hours and receive multiple offers. Part of the supply problem is due to investors who purchased many inexpensive properties during the financial crisis and have yet to resell them, meaning when it comes to first-time buyers, there just aren’t enough homes available.
So how are Midwesterners combating this? By using all of its open land to their benefit to construct new homes. That expanse of land is a luxury many regions don’t have available for building new houses.
The South, which has been selling homes like the proverbial hotcakes followed the Midwest’s 119.6 score with its own score of 111.1, which is up 3.5 percent from the previous year. The West was at 96.2, down 1.6 percent from last year, and the Northeast was at 83.1, up 17.6 percent from February 2015. The west’s slowdown is due to the fact that it was the first market to recover from the housing crisis and is now having a bit of trouble keeping momentum as it too feels the pinch of tight supply.
It may have taken a little bit longer, but it seems the Midwest is finally poised for a breakout.
