Bloomington - Normal Housing A Real Bargain

B-N housing a real bargain - By Chris Andersoncanderson@pantagraph.com BLOOMINGTON - When it comes to getting the most bang for your buck, the Twin Cities bested 243 other communities in a national housing value analysis. Full Story . . . Study results from National City Corp. and Global Insight came as no surprise to realtors and community developers, who have consistently preached the message that Bloomington-Normal housing represents a good value. “We are definitely more affordable compared to the bigger markets. People who come from Chicago to buy a home here are shocked. They get a lot more square footage for the same dollar,” said John Armstrong, Bloomington-Normal Association of Realtors president. The analysis of 299 metro areas, based on the fourth quarter of 2005, showed Springfield as the only Illinois community providing better value than Bloomington-Normal. Springfield house prices were listed at $102,000, or 7.4 percent under value. That compares to Bloomington-Normal house prices of $130,000, undervalued by 2.7 percent.House prices reflect a combination of interest rates, household income, population density and historical premiums or discounts different metropolitan areas exhibited over time. Once the theoretical house prices were determined, they were compared to actual prices, resulting in the extent prices were overvalued or undervalued. Housing was undervalued in only 86 of the 299 metro areas analyzed. The best value occurred in College Station/Bryan, Texas, where housing was 22.7 percent undervalued. New Orleans ranked as the most overvalued market. During the last quarter of 2005, house prices were 36.6 percent overvalued compared to Naples, Fla., where house prices were overvalued by 96 percent. The report noted New Orleans’ ranking was distorted by hurricane damage occurring in the last quarter. During the third quarter last year, New Orleans house prices were overvalued by 363.7 percent. “Despite higher mortgage rates and waning demand, continued strong price appreciation has pushed affordability to its lowest point since 1991 and excessive overvaluations continue to spread,” said Richard DeKaser, National City Corp. chief economist. California and Florida contained the highest concentration of overvalued markets, accounting for 18 of the 20 most overvalued metro areas. Eight of the most undervalued markets exist in Texas. “Price increases continued to slow down as they did in the third quarter, which suggests a return to normal valuations may lie ahead,” said Philip Hopkins, U.S. regional services director for Global Insight. The Massachusetts-based firm provides economic and financial analysis of countries, regions and industries. Armstrong, with Coldwell Banker Heart of America Realtors, said people moving to Bloomington-Normal from smaller, surrounding communities sometimes balk at housing prices. For every one surprised home buyer, he said five others see value in Twin City house prices. The average Bloomington-Normal home price in February totaled $156,407. “This is good news. It’s certainly no surprise to us, but it reinforces what we’ve been saying and we think housing is a good value here,” said Mike Malone, McLean County Chamber of Commerce executive director. “The cost of housing can be one of the largest expenses to families, so it’s always good to get more bang for the buck. ”Malone noted both the chamber and the Economic Development Council of the Bloomington-Normal Area use report findings like those in the National City analysis to sell the community.