A second straight year of declining home sales in the Peoria area has the real estate market at its lowest point in six years.
The Peoria Area Association of Realtors (PAAR) credits last year's nearly 12.8% drop-off to high interest rates and an ongoing shortage in inventory.
PAAR’s report shows 5,641 homes sold over the past 12 months, compared to 6,472 in 2022 and a decade-high of 7,642 in 2021. It’s the fewest closings in a calendar year since 2017 produced 5,472 sales.
Meanwhile, December ended with just 576 homes on the market in the region, down about 150 from the previous year. The continued low inventory contributed to the average sale price increasing 6.9% – more than $11,000 – to more than $176,200.
“Low inventory and higher interest rates had a lot to do with it,” said PAAR President Bill McCarthy.
McCarthy said area lenders reported an average mortgage rate of 6.8% percent last year, up from 5.5% percent in 2022, with the figure reaching 8.5% percent on the high end.
He said that while interest rates may dip somewhat this year, he expects the Peoria market to remain tight throughout 2024, with home values holding steady or going up slightly at most.
“Houses are still selling. We’re still seeing multiple offers on certain homes in certain price points,” said McCarthy, adding that the tight market means buyers need to be pre-qualified and have a down payment ready when making an offer.
Peoria's struggles with inventory mirror shortages elsewhere in Illinois and throughout the U.S. The National Association of Realtors reported an 18.7% drop in sales for 2023 compared to the prior year. That marks the biggest decline since 2007.
The Peoria area still appears favorable from an affordability standpoint, with a median price of just below $143,000 – while the national median landed at $389,800.
