In Mexico, Audrain County and the nation, real estate is hot

In Mexico, Audrain County and the nation, real estate is hot
Well over 100 homes in Mexico alone have sold since the beginning to the pandemic. The real estate buying spree is a national phenomenon.
By: 
Dave Faries
Editor

A house in Mexico went on the market last month – not a remarkable occurrence, except that it had an offer pending 36 minutes after the listing appeared online. Another Mexico home turned into a battleground between five buyers, selling for $11,000 over the initial asking price. And Clay Lockhard, a Land Specialist with Whitetail Properties, sold six area farms this summer, all before the listings even reached the internet.

“It’s crazy,” said Donna Peak, co-owner of Century 21 Peak Markham and Associates. “I thought it would be a slim year, but it’s been the opposite.”

When the pandemic hit in March and April, real estate agents feared the worst. Since spring, however, the market for housing and rural properties in Audrain County, the state of Missouri and across the country has been scorching hot.

In Mexico alone, 144 houses sold between March 15 and late October. And bidding wars have pushed average sales prices higher – an increase of more than $3,000 in June to September prices compared to year-to-date figures.

“I’ve never seen a market like this,” observed Betty Jo Sydenstricker, owner of Re/Max offices in Mexico and Centralia, and a 36 year real estate veteran.

The buying spree has gone on despite the uncertainties of coronavirus and the economy. According to the National Realtors Association, statewide sales remained high in August, up 5.6 percent compared to the previous August. Meanwhile, average sales prices are up 14 percent and the dollar volume of sales in Missouri clobbered August 2019 totals by 20.3 percent.

National sales figures soared 9.4 percent higher in September, the fourth consecutive month of growth. In July, the national median sales price crested the $300,000 mark for the first time. And Norada, a real estate investment firm, reports that year over year demand for housing rebounded from 41 percent down to 40 percent up.

“It’s been an experience the past few months,” said Peak, who has been in the real estate field for 45 years. In Mexico, houses are meeting or exceeding asking prices. In many cases there are multiple offers on properties, putting sellers in the driver’s seat when it comes to negotiations.
Peak adds that few properties are selling as investment homes. Instead, people are buying places to live.

“People are moving up to bigger houses,” Sydenstricker agreed.

And it’s not just a housing boom. Whitetail Properties, which deals in rural land, has seen a surge of demand for plots of 40 to 80 acres in central Missouri.

“Most of our buyers are looking for a combination of tillable and timber,” Lockhard observed. “I don’t think they want to get into farming. I think with low interest rates and COVID, there are a lot of people in urban areas who want to get back to rural living.”

Real estate agents note that interest rates of 3 percent and below are a driving factor. The low rates may offset rise in prices. For example, a 30-year loan of $100,000 eight years ago, when rates hovered between 4.5 and 5 percent, meant a base monthly mortgage payment of $521.65. Now, at 2.75 percent, a 30-year loan of $150,000 turns into base monthly payments of $612.36.

“You get more of a house for almost the same payment,” Sydenstricker pointed out.

Indeed, a report by SmartAsset comparing the cost of buying a three-bedroom home to renting a place of similar size, found that mortgage rates were $300 less per month on average than rents in Audrain County – $555 versus $853. That makes Audrain the second best county in Missouri to purchase a home, according to SmartAsset data.

Currently the local inventory is low – 38 properties in Mexico as of Monday, compared to 110 two years ago at this time. Demand remains high, keeping prices up.

Reflecting on the boom, real estate professionals still can’t believe sales spiked during the pandemic.

“It’s a record year for us,” Lockhard says. “We didn’t expect that.”

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