Chrissy and Jamie Watters are the typical first-time homebuyers — excited by the prospect of having a house of their own, leaving behind apartment life, and the house-hunting process itself.
But what they discovered was a shortage of homes that fit their price range and in the Bettendorf neighborhoods they preferred.
“We saw one the day it went on the market; we were the first ones to see it,” Chrissy Watters said, recalling how they were the first buyers to go through. “We put an offer in immediately and for more than we would have because we knew six more people were going to go through it the next day.”
The couple lost out on the home to a cash-only offer by another buyer.
“We knew that every house coming open in Bettendorf in our price range, there were going to be six other people who were going to want it. It taught us there was no time to think, you had to decide immediately.”
After touring a house they first passed up because of the quality of the house’s photographs on the Internet, they now are weeks away from closing on a home in Bettendorf.
Area real estate experts said the Watterses’ experience is not unusual because of a rebound in Quad-City home sales and a phenomenon not seen in years — a shortage of inventory in homes on the market.
“I don’t think sellers realize how badly we need inventory,” said Caroline Ruhl, the president of Ruhl & Ruhl Realtors. “For a long time, they’ve thought, ‘I’m not going to put my house on the market now because I don’t want to get too little for it.' "
But the reality, she said, is prices are going up, and sellers are finding a favorable environment, often with several competing offers.
“People can now sell at a better price. I think they got discouraged (in recent years) … but it’s a whole different world now,” Ruhl said, estimating it has been about 10 years since the Quad-City market had an inventory problem.
According to Gene Holst, the Quad-City Area Realtor Association’s chief executive officer, a total of 1,522 single-family homes and condos were for sale in the Quad-Cities as of March 31, a 13 percent decrease from a year ago.
“A 13 percent decrease in inventory is big,” he said. “That means there are a lot fewer houses available. I talked to an agent who had a listing put up yesterday … and it sold in 24 hours.”
In fact, sales also are up 8.6 percent in the first three months, with 340 homes sold compared to 313 a year ago, Holst said. The association’s statistics also show 370 units have pending sales, a 19 percent increase over 311 units pending a year ago.
That is positive news for the local real estate industry, which even though it remained steady during the recession has been waiting for a turnaround.
“I’d say our market is unique in that we didn’t have the big highs and the extreme lows. We didn’t hit the bubble,” said Lynsey Engels, the general manager for Mel Foster Co.
But the first quarter has seen an increase in sales of existing and new homes, she said.
“The biggest problem has been the shortage of listings,” Engels said, adding the situation has prompted agents to contact homeowners “who don’t even have their house on the market to see if they want to sell.”
Kristi McFate, a Realtor with Mel Foster Co., said that has been her strategy on a few sales — reaching out to past clients with homes in neighborhoods that she already has a buyer interested.
“We have been calling people to see if anyone is interested in selling in the area," she said. "Some say, ‘Go ahead and show it.’ "
“When you have a buyer who wants to see it, and they don’t even have to put it on the market, some say, ‘Great, let’s see what happens,’ ” she added.
Ruhl, who was at a national meeting last week of real estate brokers, said it was clear that the low inventory is sweeping the nation. In the local market, she said the Illinois Quad-Cities has more than 4.6 months of inventory.
“It’s much worse in the Iowa Quad-Cities, where they only have 2.9 months of listings,” she said.
“If it’s less than three months, it’s a seller’s market, and if it's three to six months, it’s what we call a balanced market, which means there is an equal amount of buyers and sellers. For the longest time, we had six, seven, eight months of inventory.”
In other regions of the country, such as California, Ruhl said, she heard of areas where they have only two months of inventory. “I’d say we’re in the average, about in the middle.”
But the situation also may be helping send some buyers to new construction. Engels said that when a new subdivision opens up, sales typically will begin about a month ahead of when the roads will be put in. But one of Mel Foster’s new subdivisions, which opened in late 2013, “with little possibility of streets until this spring, and 50 percent of the lots were sold right away. That usually doesn’t happen.”
She also credited the increase in new construction sales to the low interest rates available.
“It’s been a solid start to 2013,” Engels said. "Our biggest problem is getting people to list their houses."
Ruhl agreed, adding that the low inventory creates a very stressful environment “for everybody.”
“When there is a limited number of listings, the agents really have to be on top of it to notify their buyers right away," she said. "We’re seeing more and more offers on each house, so it’s stressful for the homebuyer. It’s really good for the sellers.”
Watters, who now faces the task of packing to move into a new home, said she thought they would be able to take their time making a decision. Instead, they visited only seven homes for sale and knew they had to act fast.
“The good news is it had a happy ending,” she said. "House Hunters (the TV show) is fun to watch, but not to go through."