Fueled by interest rate cuts and rising consumer confidence, home sales in the Peoria market seem to be turning a corner.
Third-quarter figures from the Peoria Area Association of Realtors (PAAR) show an 8.1% increase over the second quarter, with 1,536 closings.
PAAR President Chris Hilton says the falling interest rates have helped considerably.
“It’s getting sellers more apt to put their homes on the market,” Hilton said. “Now they know they can find another home that they’d like to purchase, and they’re not going from perhaps 3% or 4% interest rate on their current home to a 7% or 8% interest rate, which was holding him back, saying, ‘Why should we sell and double our interest? We’ll just stay here and remodel or add a room.’ Now they’re feeling more confident about putting their home on the market.”
Still, Hilton notes the third quarter traditionally sees a seasonal boost over the preceding three months, and this year’s July through September total is actually down 3.8% compared to the same months in 2023.
The region has seen 3,957 homes sold year to date, down 6% from last year, and Hilton says the market typically cools over the final three months.
“The fourth quarter, seasonally, is usually a little bit slower due to the holidays,” Hilton said. “If someone’s thinking about putting their home on the market, we always suggest the first part of the fourth quarter to get it out there, hopefully, and have it moved before the holidays start. A lot of times, then people don’t want to move during the Christmas season.”
Historically low inventory has been a big factor depressing Peoria’s real estate market in recent years. This third quarter saw 689 homes on the market, a 21.7% increase compared to last year. However, Hilton says inventory levels remain a big concern.
“Absolutely, demand is still ahead of supply. Our inventory still being down has affected multiple-offer situations, over-asking price situations,” she said. “Our days on market has gone down; last year at this time, I believe it was 33 days was the average (and) now it’s down to 28.
“We tell buyers be ready to write an offer (immediately) if you find a house you like in your price range.”
Hilton adds that, naturally, that supply issue continues to have an effect on the area’s average sale price.
“Home values continue to go up. Last year at this time, they were in the $177,000 range, and now they’re up to the $186,000 range,” Hilton said. “So your value on your home has continued to climb, which (means) the more value you have in it when you resell. Then you’ve got more to put down on the next home.”
Hilton acknowledges the increasing average price can limit what buyers are able to get for their money. But that doesn’t mean they should put off making a purchase.
“We don’t see that that’s going to change here, so we don’t advise them to wait and see what happens and if the prices start coming down, because we don’t foresee that,” she said.
Hilton says the indications they’re getting suggest more interest rate cuts are likely following the presidential election, and that will factor into this year’s fourth-quarter figures.
“Everything that we’re seeing and hearing is they expect another couple points drop in interest, which will make a huge difference,” Hilton said. “It makes a huge difference in what someone qualifies for.”
Hilton says, compared to other markets, the Peoria area remains an affordable and desirable location for buyers.
“Both as owner occupants and as investors – we see a lot of (people) from both coasts watching our market and investing in homes here locally,” she said.
Hilton says the latest Peoria sales figures and real estate industry trends offer encouraging signs for the year ahead.
“The buyer pool is staying very high out there, and now if sellers can sell and purchase a home that they’re looking for, absolutely we foresee 2025 being as good, if not better, than ’24.”
Hilton adds that homeowners who put their house on the market must be ready to move, because it likely will sell very fast.
