Sales are flat, but Bloomington, Ill., sees home prices rise

— -- Bloomington, Ill., was recently chosen as one of the top small cities in the nation. Unfortunately it wasn't a reason to celebrate.

After Darien, Conn., Bloomington was listed as a town that could be hit hardest by the financial crisis, according to BusinessWeek.com. It mentioned that Bloomington is home to State Farm Insurance when other insurance firms, like AIG, have been financially crippled.

But local experts consider the ranking somewhat misleading because State Farm specializes in property casualty insurance, along with banking and other business.

"Some life insurance firms have been hard hit and have sought out merger partners," says Gary Koppenhaver, chair of the department of finance, insurance and law at Illinois State University. "We haven't seen that here, and the local economy has done fairly well."

And State Farm is not the only source of jobs for Bloomington and its sister city, Normal. Employers also include Illinois State University, Illinois Wesleyan University, Country Financial and BroMenn Healthcare.

The diverse economy has helped keep the housing market afloat.

"We're not immune to everything that is going on, but I think that we are weathering the storm better than other parts of the country," says Laurie Christensen, president of Bloomington Normal Association of Realtors.

Despite the stock market crash, home sales haven't screeched to a sudden halt. In fact, first-time home buyers have moved ahead. "There are a lot of young, savvy kids that have good jobs and have saved money and are not going to rent any more," Christensen says.

But homes are on the market longer. That is mostly because many homeowners who want to buy a home are waiting to sell their existing home first. "It's just too scary to own two homes," Christensen says.

But when many home prices have fallen, Bloomington-Normal's prices increased.

Homes are still popular there, Christensen says, because, "It's a great place to raise a family."