REAL-ESTATE PRICES RISE 8.8 PERCENT

Residential and commercial real-estate prices in Cape Girardeau increased dramatically in the last year, a phenomenon agents attribute to low interest rates, scarcity and perhaps a bit to dreams of a riverboat gambling windfall.

In the period from January to October 1993, the average price of a residence sold in Cape Girardeau was $71,720.

During the same period this year, the average residential price increased $10,000 to $81,761, an 8.8 percent jump.

Sales of commercial properties reflect the same trend. The average commercial building sale in Cape Girardeau in 1993 was $79,603. Between January and October this year, the average price was $94,881, an increase of 8.4 percent.

The figures are based on a statistical analysis of sales made through the real-estate agencies' Multi-Listing Service.

Veteran Cape Girardeau real-estate agents say they can't recall property prices ever making such a big one-year leap.

Low interest rates and the scarcity of property have resulted in a seller's market, they say.

Low interest rates have both increased the pool of prospective buyers and reduced the number of homes available to buy.

"My feeling is that low interest rates allowed some people that would have been sellers to not sell and remodel instead, redo their home loan and stay where they are," said Carl Blanchard, broker-owner at Coldwell Banker Blanchard & Associates.

"There were a lot of refinances last year."

From January to October last year, 1,513 residential properties were put up for sale in the Cape Girardeau area. The number dropped more than half to 743 during the period from January to October this year.

That scarcity has boosted prices, real-estate agents say.

"It's supply and demand," said Marta Green, an agent for Classic Real Estate Ltd.

Cape Girardeau's active list of commercial listings last year totalled 258 compared to 146 this year. But about the same number of buildings sold -- 24 last year and 27 this year.

"The demand is steady," Green said.

The increase in prices in Jackson wasn't as dramatic this year as in Cape Girardeau, but houses are still scarce -- 345 houses for sale this year compared to 665 last year.

In Jackson, the average residential price was $76,372 last year compared to $79,978 this year.

Locally, the largest category of buyers -- an estimated 40 to 50 percent -- consists of people shopping for houses in the $70,000 to $100,000 range. "And that is where the shortages are occurring," Blanchard says.

These usually are second- and third-time home buyers.

Construction of new houses has closed the gap in recent years, Blanchard said, but the demand remains.

"We are seeing some `spec' homes being built in the $150,000 to $225,000 range, and yes, there's a market for it," he said. "But the higher the price the more the market for it diminishes."

Buyers in the $50,000 to $70,000 range also are having trouble finding houses, agents say.

Blanchard said recent increases in the prime lending rate -- now at 7.75 percent -- may be starting to have an effect on the market.

"But our feeling is it doesn't adversely affect our business until it exceeds 10 percent," he said. "Then we have to look at alternative financing."