The real estate market in Springfield and surrounding areas is booming. The problem is, there aren’t enough houses to keep up with the demand.
“Last year, we closed over a billion dollars, and that’s the first time ever,” said Jeff Parker, managing real estate broker at Murney Associates, Realtors, one of Springfield’s largest real estate firms. “We’re right on track to close a billion this year.”
But Parker is quick to note housing inventories are shrinking well below the industry’s comfort level.
Population increases in the city are adding to the shortage. According to census data, the populations of Springfield and surrounding communities are on the rise. Estimates put Springfield’s population at 168,113 people, a 5.6% increase since the 2010 census.
Area developers are trying to meet the demand to provide more homes for area growth. According to research by Springfield Business Journal, the 10 largest subdivisions in the Springfield area have had a 106% increase in available lots in the past year. Homebuilders are seizing the opportunity to grow their businesses.
Parker said the outlook for Springfield’s housing market is bright, except for one detail.
“Interest rates are low and prices are higher, but not crazy high,” he said. “The only problem is we have a shortage of inventory. What we consider a healthy real estate market is four to five months’ worth of inventory.”
He said that in 2018 there was about three months’ worth of home inventory, but this year, the market is down to only two months.
According to data from Realtor.com, there were 1,703 active listings in Springfield in October, a 14% decrease compared with last year. Nationwide, listings have only decreased 7%.
Median list prices in Springfield have jumped 18% since the previous year to $225,000, according to Realtor.com, while the U.S. median list price has only risen 4%, now up to $312,000.
Parker said average home prices in Greene, Christian and Webster counties are up 7% year-over-year to a little over $190,000.
“This time of year, you would think it would slow down a little bit,” Parker said. “But I think with the good economy, the good interest rates, the buyers are still out there.”
Building to demand
In response, developers have tried to do what they can to increase the housing stock.
Bussell Building Inc. is developing six new subdivisions, totaling 1,246 lots available.
Millstone Crossing, located in west Springfield, is one of Bussell’s latest. A Greene County recorder’s office filling shows a deed of trust in early November between Central Bank of the Ozarks and Bussell Building with a note amount of $5 million.
Bussell said other ongoing subdivisions include Eagle Ridge Estates in Nixa; Forest Heights in Nixa; Green Ridge Estates in Battlefield; another 200 acres in Battlefield that is in the preliminary stages; and Auburn Hills in Republic.
“Southwest Springfield has been a hot area for us,” said Tyler Bussell, vice president of Bussell Building, also identifying Nixa and other areas as hot spots in this busy year. “In the last year or so, we’ve just tried to sweep up land and get (subdivisions) in every corner of the surrounding areas. We’re not really seeing one spot being slower than the other. It’s pretty evenly spread.”
Battlefield also is becoming a popular area for development, Bussell said, adding his unnamed 200-acre development in Battlefield already has led to 50 calls from potential homeowners within months of beginning work.
This year, Bussell Building is projected to build around 150 homes and finalize purchases on about 120-130 of them.
Bussell said 80%-85% of the homes the company sells are built to suit or customs, and single levels go for $180,000-$280,000, while basement homes are priced $280,000-$360,000.
Other new subdivisions with lots available in 2019, according to SBJ list research, include The Lakes at Shuyler Ridge developed by Shuyler Ridge LLC in Republic and Forest Trails near Farm Road 193 and East Cherry Street, developed by Rita Baron.
According to the SBJ research, in 2019, there were 369 available lots in the largest 10 subdivisions in the area, with 4,351 current and future lots planned. That represents an over 100% increase in available lots for new homes, compared with SBJ’s numbers from 2018.
As the housing market rebounds, Springfield-area workforce growth is a key contributor.
Ryan Mooney, senior vice president of economic development at the Springfield Area Chamber of Commerce, said the workforce in the Springfield community is growing about 1% a year the last few years. Mooney said that’s higher than the national average, which is 0.6%.
“That tells us that anytime a worker is added to the workforce, a job is created,” he said. “The companies can’t find enough people. When they are able to find someone that enters the workforce, they are hired right away.”
Mooney said the chamber is looking for ways to improve the workforce growth percentage.
He said communities that are seeing higher economic growth, about 2%-3% each year, have funding for community betterment projects, such as parks or revitalizing downtown areas to make things more attractive for potential workers.
Bussell said he’s seeing that migration trend in the area.
“At the very least, 40% of our sales are for out-of-town buyers,” he said, noting many come from Kansas City and St. Louis and as far away as California and New Jersey.
Bulk of exterior work is projected to be completed by summer 2021.
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