Pandemic Prices and Rural Residences: How COVID-19 Changed Home Values in Quincy and Hannibal
By Matt Dutton, Certified Residential Real Estate Appraiser.
Everyone knows the residential real estate market is hot right now
Stories of highly competitive markets in which buyers must make offers on homes—sight unseen, above contract price—have become common over the last year. Those stories stem primarily from major metropolitan areas across the country. However, rural areas like Northeast Missouri and West Central Illinois have also taken part in the boom currently sweeping the nation. Just how much this area's housing market has grown takes some analysis. At Spurgeon Appraisals, we take pride in staying on top of the housing market, particularly during periods of rising prices.
COVID-19 has driven the rising residential prices
It is important to understand exactly why prices have been rising so rapidly over the last year. The root cause is COVID-19, or rather the reaction to it. With millions of Americans out of work, the Federal Reserve dropped interest rates in hopes of stalling or preventing a depression. As a result, money was made cheaper, driving many fence-sitting buyers into the market for the first time and giving others more buying power. Sellers reacted accordingly, and prices began to creep, or leap, up. Supply has not been able to keep up with this new demand, which has further fueled the price increases. According to Zillow, median home prices have risen by 5% in Illinois and by 7.7% in Missouri over the last year.
Pandemic Home Prices
Why Prices Rose So Fast
The root cause was COVID‑19, or rather the reaction to it.
Interest Rates Dropped
The Federal Reserve dropped rates in hopes of stalling or preventing a depression.
Money Got Cheaper
Fence‑sitting buyers entered the market for the first time; others gained more buying power.
Sellers Reacted
Prices began to creep, or leap, up.
Supply Couldn’t Keep Up
The gap between supply and new demand further fueled the price increases.
Median home prices, past year (Zillow, 2021)
+5%
Illinois
+7.7%
Missouri
Farm · Commercial · Home appraisals | Missouri · Illinois · Iowa
The median sale price in Quincy has risen
To gain the best understanding of how the markets have been reacting locally to the pandemic, we need large data sets. Of the areas that Spurgeon Appraisals covers for residential appraisals, Quincy and Hannibal have the highest sales volume. In Quincy, the median sales price for homes falling in the $75,000 to $275,000 price range has been $138,850 over the past six months. Over the first six months of the pandemic, that price was only $130,000. That is a not-insignificant increase of almost 7%, or just over 0.5% per month.
The median sale price in Hannibal has risen even more
Hannibal has seen a more dramatic increase. Using the same metrics, the median sale price in Hannibal has been $158,500 over the last six months. Comparing that to a price of $138,000 for the first six months of the pandemic gives an increase of almost 15%.
Pandemic Home Prices
Quincy & Hannibal Medians
Median sale price, homes in the $75,000 to $275,000 range.
Source: Spurgeon Appraisals sales analysis, April 2021
Farm · Commercial · Home appraisals | Missouri · Illinois · Iowa
Rural homes will need an appraiser to discover the change in value
This is an admittedly broad look at the housing market. Some price ranges have fared better than others during the pandemic. In more rural areas, where housing is generally harder to come by, the effects could be even more pronounced. There are many factors that go into valuing a home, and in order to determine if the value of any individual house has increased with the pandemic, we need to be much more specific.
At Spurgeon Appraisals, we can help you to determine if your home is now more valuable and how much it has increased. The process of getting an appraisal has never been easier. Our appraisers are professionals that you can talk to, and they perform quality appraisal work that you can trust. Visit our website to get a free quote.
