Home sales in the Peoria area remain sluggish, continuing an extended downturn in the market.
The Peoria Area Association of Realtors (PAAR) reports a 6.4% drop in first-quarter sales compared to a year ago, with 997 closings.
PAAR president Bill McCarthy said a low supply of available homes remains the biggest factor in the decline.
“If we had more inventory, we would have more sales,” McCarthy said. “Right now in the Peoria market, I did a search just the other day and there was 435 homes for sale in the Peoria area. In the past, that was always somewhere around 1,800-2,000 homes.
“If you were to drill down a little further and just search Peoria, Tazewell and Woodford counties, there's only 269 houses for sale. I was just at a function with a bunch of Realtors, and they're all saying the same thing: ‘I'm busy, but I just don't have any houses to show.’”
McCarthy said a shortage of new home construction is part of the problem, but another issue is many existing homeowners choosing to hold onto what they already have.
“Some of them would like to move, but then when they look at it, it's like, ‘Oh, it's a little more expensive to go out and buy something,’” McCarthy said. “Plus, there are a lot of them that are sitting on 3% interest rates and they're going, ‘Well, if I sell and I have to borrow the money now, I'm going to be at 6.5%, maybe higher’ — and they're just willing to sit it out right now.”
While the market's average sale price of $144,600 is about $7,400 less than this time last year, McCarthy doesn't see that as cause for concern.
“Property values are still going up,” he said. “There was a little dip this quarter, but overall we're still seeing a steady increase in the price of homes. Even if the prices are inching up a little bit, people are moving to Peoria; it's a great place to live.”
The first-quarter numbers follow a second consecutive calendar year of declining home sales, as the Peoria real estate market dipped to its lowest point in six years. The 5,641 homes sold in 2023 were the fewest since 2017.
With the low supply of available homes, sales are happening quickly. The average number of days on the market dipped to 35 in the first quarter, compared with 49 days in January-March of 2023.
“There's no shortage of buyers; most agents have multiple buyers right now,” McCarthy said. “When a buyer looks at a house, in the old days they'd have multiple showings of it to the same person and they’d have time to think about it. Now we look at it, and a lot of times if it's the right house, you make an offer right then and there.”
McCarthy said he believes interest rates likely will hold steady throughout the year. He said sales typically pick up in the spring, and the market remains favorable to sellers as demand continues to exceed supply.
