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Real Estate Outlook: Jeff Kester

CEO, Greater Springfield Board of Realtors

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Jeff Kester leads the Greater Springfield Board of Realtors and its 2,400 members. He took the job in August 2020, leaving ReeceNichols Real Estate, and continues to serve as board president of Missouri Realtors.

SBJ: Nationally, the market experienced an initial freeze in March, followed by an increase in demand in August. Did Springfield record the same trends?
Kester: There was a freeze, but it was very short-lived here, and it was mainly a time for people to say, “How are we going to do this?” Once that was done, the strong demand that we have seen the last few years developed all over again. That strong demand has played as big a part in the market as it has the last two or three years.

SBJ: What role have technologies, such as virtual home tours and remote notaries, played in real estate this year?
Kester: What it really did was exemplify the need for people to have been using these technologies before this happened. I had an agent who had sold homes using FaceTime. You get the visual of the house, but you’ve still got the agent there with you. When you combine the technology with the human interaction and expertise of a Realtor, that’s quality technology.

SBJ: What are buyers in Springfield looking for in a home?
Kester: Everything you read as a trend is true for Springfield, though probably to a little less dramatic extent. We have a great desire for walkability and mixed-use developments. People are more comfortable than ever before with condominiums or dense development than Springfield has traditionally seen.

SBJ: Existing home sales are at a 14-year high, but new home inventory is at an all-time low. Is new construction able to keep up with demand?
Kester: New construction is going on, but if it’s keeping up is a question of price range. In the 1990s and the early 2000s, there was an explosion of new construction for first-time homebuyers. That’s what we’re really missing now. This is really exacerbating the inventory because if you don’t have inventory for those folks, it creates a delay in the whole system. It’s gotten so low that sellers of houses that you would expect to be on the market aren’t on the market because they’re afraid there won’t be anything for them to buy – which in many cases is true. It’s almost become this self-fulfilling cycle of low inventory. Along with homeowners who have refinanced with these historically low interest rates (and) are hesitant to leave those rates behind, it’s like the perfect storm.

SBJ: What’s the key to resolving this?
Kester: We actually do need more new construction. We’ve still got pent-up household creation from the Great Recession, those times the younger buyers were forming their households while living with family or renting. We’ve got to get more of that affordable first-time buyer price point built. In order to get that to happen, we’re going to have to see a change in regulations, which cost our homebuilders so much. A more robust inventory in that price segment is really what we need to break this loose.

SBJ: Interest rates are holding steady at historic lows, and with demand so high, home prices are going up. At what point will people be priced out of the market?
Kester: Even if you had a house that was considered affordable four or five years ago, the only thing keeping it within reach are those low interest rates. If the price growth has not started to price people out, it has started to frustrate some. You have rates now in the 2%-3% range, and (from) what the National Association of Realtors is forecasting, that’s not going to change in the next two to three years.

SBJ: Is another housing bubble next?
Kester: What I think keeps us from being in a bubble is that this is based on real economics: household creation numbers, pent-up demand and a historically low supply. In the bubble that led to the Great Recession, so much of the demand was artificially created by unsustainable conditions and financing programs that had no accountability.

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