Many people only start looking up market prices after receiving a notice to renew their rental agreement. Recently, someone renting in Savoy contacted me, surprised by the renewal amount. So, how much have rental prices actually increased in this area? And at this price, wouldn't it be better to buy a home instead?

First, looking at rental prices, the average rent in Savoy is reported to be around $954 (Niche). Other surveys show it can range from $992 to $1,202, and the median total rent for 2024 was $1,056 (City-Data). Compared to the average rent of $1,752 for apartments in nearby Champaign, Savoy is quite affordable for its proximity to the campus.

What about home prices? The median home price in Savoy is reported to be between $414,000 and $425,000 as of 2026 (Zillow, Homes.com). Notably, there are reports that it has increased by 17.6% in the past year (Ridley). While rental prices have remained stable, home prices have surged significantly.

To understand this gap, we use the price-to-rent ratio. This is the number obtained by dividing the home price by the annual rent. In Savoy, the annual rent compared to the home price is so low that this ratio exceeds 30. Typically, a ratio above 20 indicates a market where renting is relatively favorable. However, due to the characteristics of this college town, rental prices for students tend to lower the market rates, so families looking for homes may experience different effective prices.

How does it compare in terms of monthly expenses? If you buy a home priced around $420,000 at the current interest rates, the mortgage payment often exceeds double the rent. If you have a down payment of over 20% or plan to stay in the area for more than five years, the calculations for buying may not be bad. Conversely, if you plan to move after your child graduates from college or still lack a substantial amount of money, waiting while maintaining the current low rent seems like a reasonable choice.

Let's break it down a bit more. If you buy a home priced around $420,000 and put down 20% as a down payment, the loan principal would be around $340,000. However, when you add property taxes and insurance, your monthly expenses would still be much higher than renting at around $1,000. On the other hand, living in a rental allows you to keep your funds liquid for other investments or savings. Developing a habit of checking market prices at renewal times can also help you gauge how much the next contract might increase.

In smaller markets like Savoy, there are fewer listings, so it may take time to find the desired home. Instead of making a hasty decision, it's wise to compare with nearby Champaign and Urbana, considering commuting distances and local amenities before making a judgment. Additionally, this area tends to see seasonal fluctuations in rental prices based on the university's academic calendar. Most listings and renewals occur between May, when the summer semester ends, and August, when the new semester begins, so moving slightly outside of this period can help you find better conditions or negotiation opportunities.

If you're leaning towards buying, it might be worth looking at the western areas of Champaign, which are a bit closer to the city center. This often broadens your options without significantly increasing commuting distances.

The area around Savoy overlaps with the Urbana-Champaign school district, leading some Korean families to move here for their children's education. Check school ratings through GreatSchools or state education department resources, but remember that school district boundaries can vary by address, so verify directly before signing a contract. If you're coming from out of state, it's also advisable to check the Illinois property tax rates in advance. This article does not constitute investment or legal advice, and consulting a professional before signing a contract is recommended.