The Peoria area real estate market continues to face a sharp decline in homes for sale, leading to lower first quarter closings with prices rising.
The Peoria Area Association of Realtors reported 564 market listings in the first quarter, down from 1,087 a year ago and 2,174 in 2020. PAAR Chairman Ryan Cannon said that was the lowest supply ever on the market, resulting in a 12.2% drop in Sales.
“We had 48% fewer homes for sale, so of course there was a small drop in the number of sales compared to 2021,” Cannon said. “But overall, (with) 48% fewer homes, 12% fewer sales, it’s still a good number.”
Low inventory causes homes to sell quickly and cost more. As the number of sales fell by 166, the average price fell from $155,937 to $159,076 and the average length of stay for homes on the market fell to 47 days from 77 previously.
“Prices, since 2020, have increased by almost 20% almost 20% – 19.8%. So you’re seeing price increases year over year, and I still expect to see more price increases this year,” Cannon said, adding that the situation is not unique to the Peoria.
“We’re not alone. I mean, it’s like that across the country. Other markets, even in Illinois, have less inventory than that,” Cannon said. lots of houses, we just sell them really fast.”
Indeed, Illinois Realtors reported that the state’s median sale price of $260,000 in March was up 4.6% from a year ago, while home inventory fell 32%. .1%. The number of homes sold statewide last month fell 9.2% and the average home sold in 36 days.
During this time, the United States Housing Affordability Report lists Peoria County among the top three places in the nation where the smallest portion of the average local wage (10.2%) is needed to pay the mortgage on a home at the median price.
Cannon listed market affordability among the factors creating the current imbalance between supply and demand.
“We simply have more buyers in the market than ever before. You have people nationwide looking at Peoria and (it’s) the affordability, they appreciate that. So we have people from outside the area looking to invest in Peoria.
“We have ‘Gen Z’ and Millennials who are buying at a faster rate than they used to, and we also have older people who aren’t moving into assisted living or independent-type residences as quickly as they have done so in the past.”
Another explanation behind the low inventory, according to Cannon, is more than a decade of reduced new home construction.
“Builders kind of pulled back – a lot of them, from 2008 to 2020, were just not really building spec homes; they were building when someone asked them to, but they weren’t building entire neighborhoods,” Cannon said. “So under-building for a decade and then all of a sudden wanting to build with the supply chain issues and the labor issues made it very expensive to build.”
Cannon said he believes the market’s home inventory will begin to normalize this year as interest rates rise to offset rising inflation. As for advice for buyers and sellers facing a complex market, Cannon recommended working with real estate professionals — and acting quickly.
“Sellers, now is the time. There’s no reason to wait until May or until June to put your home on the market, if you have a plan for where you’re going,” Cannon said. , noting that many people who sell homes choose to find their next place before listing their possessions.
“As far as buyers are concerned, it’s all about being ready. To get your feet wet and test the market, it’s not a good market for that. A colleague of mine said it’s like drinking from a fire hose from a buyer’s perspective. It’s like you go out there and kind of want to understand the market and feel it, but you instantly have to make a decision about which homes you like.