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Market Factors: Beloit Real Estate on the Rise

Market Factors: Beloit Real Estate on the Rise

Market Factors: Beloit Real Estate on the Rise

By Meghan M.M. Trimm
Sponsored by Beloit Auction

The real estate market is changing. Even in the little city of Beloit, WI, housing prices are on the rise. This is set to disrupt the buyer’s market we’ve been experiencing. Even as these changes come steady, affected by factors such as interest rates, supply and demand, and governmental policies, there is one bastion of real estate sales that levels the playing field between buyers and sellers – auctions.

National trends have continued to grow in favor the auction process for buying and selling homes. There are a few reasons for this including the speed, transparency, and market accountability of auction. Because they are open competitive buying forums where supply and demand work instantly, real estate auctions serve as quick and reliable predictors of market forces. Right now, Beloit Auction sales are indicating steady growth in the local economy. This trend was confirmed with a simple check of local data.

Beloit’s real estate market is on the rise. According to Trulia, the average cost per square foot in this city is $67 and the median home sale price tag is $95,000. That is up nearly ten thousand dollars from the end of the Great Recession in 2013. This rise has been steady, and is expected to increase. That means the balance of the buyer’s and seller’s market is about to change.

How do you stay ahead of the curve? Certain factors define the ups and downs of the market:

Rising Interest Rates

When Janet Yellen and the Federal Reserve Bank decide to raise the interest rates at which banks can borrow money, banks pass on part of the rate change to consumers. That means as interest rates and inflation rise, so will interest rates for new mortgages. In other words, mortgage loans will be slightly less accessible, because they will become a few interest points more expensive.

Supply and Demand

Supply and demand is a complicated give and take that sets the price of homes based on how many homes are available versus how many people there are looking to buy them. For instance, if there are many, many homes for sale in an area and not many people looking to buy there, the price of the homes with be lowered and lowered until buyers are attracted. The opposite is also true. If an area is very popular and most of the homes are already occupied, the price of the few available homes will go up to shrink the number of people vying for a given house.

Supply and demand are affected by things like income trends, generational values, and the cycle of boom and bust economics a given area.

Right now, three factors are at playing nationwide and here in Beloit:

  1. Incomes are rising and housing prices are rising with them. But both are still below the national average. That means, Beloit has growing power that is attractive to businesses and new talent. In other words, because we’re doing well, we are going to keep doing well. We’ll attract new talent and new jobs, and then we’ll do even better. That makes Beloit a popular area where housing will become more and more scarce. All of which means we should continue to see a steady rise in home prices.
  2. The biggest generation in American history has hit home-buying age, and they are getting over their cold feet. You might have heard that Millennials are putting off buying the typical American dream items like houses and cars and weddings. That’s still true. But we’re starting to see a subtle shift in this trend, which might indicate a propensity for Millennials to enter the housing market in greater numbers in the next few years. In short, the prediction is that Millennials will demand housing and prices will rise.
  3. If it wasn’t clear from bullet point one, economies in US regions trend through boom and bust cycles every 40 years or so. This, some economists think, is a natural cycle caused by investments in trends like manufacturing parts for items that go out of style and get replaced by manufacturing new parts in different areas. Researchers, economists, and business people all over the world and in Beloit are always looking to install protective factors – like product diversity—in a region to make sure that one company’s failure can’t devastate a whole community again. (Think the loss of manufacturing jobs in 1970’s and 80’s.).

 

That being said, Beloit is coming up. We are experiencing the first stages of an economic boom that will hopefully be more sustainable. With a boom comes increases in demand and higher housing prices.

Governmental Policies & Subsidies

Some legislation intentionally or unintentionally affects the housing market. For example, in the midst of the housing crisis the Federal government created the First Time Home Buyer Tax Credit. It was created to be a stimulus for Millennials and other first-time buyers to get out there and invest in homes. It helped, but it didn’t have the affect they hoped for. Too many Millennials were sidled with student debt and low-paying jobs. They couldn’t afford houses even if they wanted them. Ironically, now that incomes are rising and some Millennials are tackling debt and preparing to buy… few people realize that tax credit expired. Because the expiration is not well known, it still acts like a carrot, bringing first time buyers into the market.

 

Another piece of legislation meant to affect the market is the Dodd-Frank Act. Dodd-Frank, you know, the one that made Wall Street exec’s pay back their bonuses. That act also had provisions that define “qualified mortgages” for banks, restricting the discretion with which banks can issue loans. This was meant to prevent predatory lending, and it has. But, it has also put a damper on debt-strapped Millennials and low-income families’ ability to get mortgages.

 

To sum up, governmental forces have both increased and limited the number of people seeking homes. The hope is to avoid another housing bubble. Perhaps they accomplished this goal and broke even.

 

Bright Spots:

One of the places you can witness these forces at work is Beloit Auction. Normal real estate agents don’t let you follow them from house to house and see the terms of each sale.  Yet auctions are open books. Because the prices of houses sold at auction are determined instantaneously and transparently by the market force of supply and demand, they are good indicators of local housing market trends.

Beloit Auction has a few reasons for success, including their absolute professionalism and devotion to the process, but they are also the poster child of Beloit’s growing economy. Higher demand for homes has created real estate auctions where the result is satisfaction on both sides. Sellers are happy because prices are good, buyers are happy because houses are a good investment again. Yes, auctions are witnessing Beloit real estate on the rise!

 

Find out more about selling real estate at Beloit Auction.

Attend a real estate auction.

Read more about the auction process.

 

See you at the auction!