Inflation prompts residents to make dollars and sense of DeKalb County’s tumultuous housing market

DeKALB – Sycamore resident Kelly Miller knows all too well about the math of moving in this housing market.

As both an area Realtor at Team Kelly Miller and a seller, Kelly said she knows some tricks of the trade to get the most value for her money by listing a home for sale.

“It’s very important that when sellers list their home that their home sparkles, that it feels good,” Miller said. “It’s transitional. The decor, it’s transitional. That it’s not necessarily ultra modern and it’s not traditional. A lot of our buyers in our marketplace are liking the transitional look.”

But not everyone is a Realtor by profession like Miller.

For many homebuyers, the demand is outpacing the available options in the housing market.

In some cases, it has prompted maneuvering between homebuyers to see who can outspend the next.

Tammy Batson, undergraduate coordinator for the economics department at Northern Illinois University, said something has to give.

“People are going to have to figure out how to get through this time period until maybe inflation subsides, which will help interest rates, which may help improvement in this overall housing market,” Batson said.

With the market at its current state, experts say it’s important to establish and maintain a relationship with a Realtor to help make dollars and sense of the real estate market and transactions.

Batson said it is important to ensure that favorable interest rates are sought by consumers.

“When you go to 5% to 6%, let’s say and you’re buying a car, maybe it’s not that big of a deal,” Batson said. “But when you’re buying a house, it’s a significant deal on a 30-year mortgage. These tools used by the Federal Reserve to try to fight off inflation harms that market more than others because of the 30-year time commitment for mortgages.”

Shaw Local News Network asked readers a series of inflation-related questions in an unscientific survey conducted in June, including how they feel about their current financial situation, what they have done to cope with soaring prices and what they might do. Respondents were only allowed to weigh in once per device or email address.

When asked if their financial situation was better or worse compared to 6 months ago, 39%, 448 of the 1,146 responses, considered themselves much worse off. Meanwhile, 1%, 15 respondents, said they considered themselves much better off.

According to the survey, 95 respondents, 8%, said they or a spouse had lost a job in the past six months and 170, 15%, said they have adjusted their spending habits as a result of rising costs or inflation.

Regarding how they feel about the next six months, 36%, 411 people, said they thought they would be much worse off financially. Of the total people who replied, only 2%, 18 people, said they felt they would be much better off.

The survey also asked participants to consider their own decisions and rank what they were most likely to cut. Concerts or sporting events were first on the list of things to cut for 70%, 807 respondents. That was followed by alcohol/smoking/gambling, 59%; travel, 58%; newspapers or magazines, 48%; dining out, 44%; clothing, 40%; groceries and streaming services, 36% each; and gas was last at 25%, according to the survey.

Miller said she is in the process of closing on the sale of her home she listed just two months ago. She said her plan is to secure interim housing before ultimately buying a home out of state where she can be closer to family.

In this housing market, experts say one likely option for some people is to stay in your current home a while longer to help ensure your move accounts for risk.

Linda Tillis, a Realtor for O’Neil Property Group – By Grainger Communities Team, said it may take longer for homebuyers to find their next home in this housing market.

“That can discourage buyers because they have to attempt to buy several houses before they get one,” Tillis said.

Tillis said she’s noticed a number of signs promoting rentals in and around the area.

“There are more places to rent this time of year than probably any other,” she said.

But Tillis said there are still far more renters in DeKalb County than there are good places to rent.

Will Heinisch, landlord at Heinisch Properties, said he’s noted more and more people are renewing their leases rather than moving out.

“We’ve got a waiting list,” Heinisch said “There’s a lot of tenants looking for housing. There seems to be a shortage of housing right now.”

Heinisch Properties are townhomes nestled in DeKalb’s South Point Greens Subdivision. The waitlist at Heinisch Properties may accrue one to two prospective tenants at a given time.

Heinisch said his tenants have a track record of staying more than five years.

“We have a lot of longer-term tenants,” he said.

Sandwich resident Sieara Tocheck said she’s been searching for a roommate for about a month, and has grown so frustrated with her fruitless search that she’s turned to posting ads in local community Facebook groups.

“I had several people say they would like to come and view it, but never show,” Tocheck said. “The experience has been rough.”

Tocheck said she wishes rental establishments would relax their rules to help recruit new tenants.

“What puzzles me is the specific rules that most rental places have, such as specific dog breeds, how many children you are allowed, rent increases, and that you have to be making three times the amount of the rent in order to be considered in most areas,” Tocheck said.

“In most areas, it’s actually cheaper to buy a house than to be renting one, but with constant price hikes in everything, the younger generations are having trouble being able to save up enough money to even put down a deposit on a house.”

But rental establishments have faced their own set of challenges in this housing market.

Heinisch attributed the increase in rent assessed to his tenants to the rise in the cost of property maintenance.

It’s a trend noted throughout 2022, following a winter where utility costs such as natural gas skyrocketed.

“The cost of maintenance has [increased] anywhere from 25% to 40%,” Heinisch said. “The cost of everything that we buy to maintain the properties or the contractors we hire to maintain the property, their supplies are all going up from air conditioning units to appliances [to] plumbing fixtures. There’s even shortages of some of that stuff. A lot of times you end up having to use a substitute, which is more expensive or sometimes have to wait for the product.”

The rental market, like the home selling market, has been tumultuous for months, with rent hikes forcing low income DeKalb County tenants who rely on housing vouchers to relocate earlier this year.

Heinisch also cited the hike in interest rates by the Federal Reserve for causing the rent to increase. Monthly rent doesn’t have a fixed rate in the way a mortgage does.

“We all have loans on our property, which is commercial property,” he said. “A lot of commercial property is tied to what they call variable rate loans. So, as the feds raises interest rates, so does the cost of money and the loan payment goes up no different than when people buy a house. But a lot of times when people buy a house, they can get a fixed rate mortgage.”

Sycamore resident Marcia Wilson said she’s thinking of downsizing and is a working with an area realtor to find a new home.

“I am currently living in a two-story home and would like to get rid of some of the maintenance and move into something where there would be less maintenance,” Wilson said.

Wilson said she would like to continue living in Sycamore because she has family in the area.

She said that knowing there is a bit of competition for housing merely validates the notion that Sycamore is a desirable place to live.

“It’s OK to have competition,” Wilson said. “I’m very fortunate that I can be patient.”