PAAR president Simpson points to ongoing inventory shortage for drop in Peoria-area 1Q home sales
First-quarter home sales in the Greater Peoria area are down 8.3% from the same time last year, and a lack of supply continues to be the main reason.
“We still need inventory. We desperately need some new listings on the market,” said Peoria Area Association of Realtors president Robin Simpson, pointing to a 28.6% dropoff in homes for sale compared to the first three months of 2022.
“That's not really a bad thing that sales are down; we just need more inventory. Because when things are getting on the market, (if) they're priced appropriately (and) they're in good condition, they're still selling very quickly, many times with multiple offers.”
PAAR reports 1,099 homes sold from January through March, down from 1,198 a year ago. A market that at times exceeded 2,000 listings available just a few years ago now sees fewer than 500 homes for sale.
Simpson notes the supply issue is not just a Peoria problem, but nationwide. According to Illinois Realtors, the statewide inventory in March saw a 16.2% decline from last year.
“We need more new construction,” said Simpson. “We need the price gap between what it costs to build a new home and the prices of existing homes – that gap needs to be smaller so it's affordable for more people to build a home so that we get more inventory in our market.”
According to PAAR, the average price for homes sold in the first quarter was around $153,000, down about $5,000 from last year. The average number of days a listing stayed on the market was 48.
Simpson says the Peoria area’s average cost is well below the national average, making the region a desirable place to relocate.
“We have one of the most – if not the complete most – affordable place for housing,” she said. “So people that have learned they can do their jobs remotely, or they want the style of life that we have to offer here, with our great park systems (and) our great leisure activities, all those things … again, with the affordable housing (prices), people are coming from all over the country to move to our area. So that means more people moving in and less inventory.”
Simpson says she expects the Peoria area real estate market for the rest of 2023 will stay similar to recent years.
“We're seeing interest rates really pretty stable right now,” she said. “We need more inventory (and) when we get that, it will become more of a balanced market. But right now we're sitting with less than a month of inventory, so we need more houses.”
Affordable housing developments
Simpson acknowledged Peoria is facing a significant shortage of housing options for people in economic need and said her organization is trying to assist in addressing the need.
“PAAR has been a great advocate for our area in revitalizing some of those areas where we need the entry-level housing or affordable housing,” said Simpson. “In those areas where we brought the Counselors of Real Estate in and they’re planning with stakeholders around our community to attack that very problem.
“So they're looking at some of the homes that have been sitting vacant – is it rebuilding those? – so that there are options in different areas for people to enter into homeownership.”
Simpson said the international Counselors of Real Estate planning committee has been instrumental in looking into the best development options for the former Harrison and McKinley school sites on Peoria’s south side.
“They came in and met with about 60 stakeholders from our area, including our local government, school districts, park districts, fire and police, medical, businesses,” said Simpson. “They all came to the table to really look at what's needed in those areas after the schools are demolished, so that we can help revitalize those areas. We met with a lot of the residents, resident homeowners and rental (tenants), people living in those areas, and said, ‘what do you need to see?’
“A lot of them have pride in the history of those areas. They want to stay there (and) they want to welcome more people into that area. So we're working with those stakeholders, giving them plans that are very detailed on how to bring this to our community: What's the timeline? What are the steps that need to be taken from each of the stakeholders?”
Simpson said another planning meeting will be held in the next few weeks before additional recommendations are presented to the city.