Local real estate agents react to historic national spike in home prices

Home prices in America continue to rise but the level of cost severity depends on where people live.

According to S&P CoreLogic Case Shiller's U.S. National Home Price Index, home prices rose 18.8% in 2021, the biggest increase in 34 years and substantially higher than 2020, when it was 10.4%.

All regions of the country saw price gains but the jumps were most pronounced in the South and Southeast -- each of which were up over 25%, said S&P, with Phoenix, Tampa and Miami reporting the highest annual gains among the 20 cities indexed in December.

Locally

"According to the latest quarterly reports from Southeast Missouri Realtors (SMR), the median single existing home price rose 9% year-over-year to $179,900 compared to the previous quarter when year-over-year was up 4%," said Terry Baker, SMR's association executive, with offices in Cape Girardeau.

"Usually, Southeast Missouri does not feel the extreme market movements as profoundly as coastal states or in major markets. In certain price points and certain areas of the region where inventory has been slight and demand has remained steady, we may be close to matching the national data," said Lori Fowler of Area Properties Real Estate with offices in Cape Girardua and Scott counties.

Tim Meredith of Century 21 Ashland and Century 21 Premiere brokerages in Cape Girardeau and Sikeston, agrees.

"We have certainly seen price appreciation in our area, not to the extent as in metropolitan areas or in 'hot' markets nationally, but definitely upward movement," he said.

"I do believe home prices have already started leveling off," said Liz Lockhart of Cape Girardeau's Riverbend Realty.

"We'll know more in a month about local trends as the weather gets more reliable. Daylight saving time will bring an uptick in showings, which can affect prices. Of course, the big unknown is what is happening in Eastern Europe."

The horizon

Bill Cole of Realty Executives Edge, with offices in Cape Girardeau and Jackson, said what prices will do will be impacted by a variety of factors.

"I think it depends on what happens to the cost of building materials. If inflation persists, the cost of new construction will continue to increase, making new homes that much more expensive to build," Cole said.

"Contractors can only eat so much of the additional cost before raising prices. The cost of existing homes piggybacks off the increased cost of new construction -- similar to how the shortages of new cars drove up the cost of used cars. Rising mortgage rates are definitely a concern. The rates still are historically great but higher rates adversely affect the affordability of housing."

Meredith said he expects the amount of appreciation in home prices to slow in the coming months.

"We still have qualified buyers in the market but increasing interest rates should temper things a bit. This is a classic example of the laws of supply and demand, applied to real estate," he said.