Peoria area home sales dipped nearly 5% in 2024, and signs point to some of the biggest challenges in the market to continue into the new year.
"We still believe it's going to be a tight market, that inventory is still going to be an issue, and that the best advantage a buyer or a seller can have is to work with a realtor who has expertise and can help them get get the most for their money," said Chris Hilton, president of the Peoria Area Association of REALTORS.
5,376 homes sold in the Greater Peoria in 2024, compared to 5,645 in 2023. The average home sale price last year was $188,903, a 7.3% increase from $176,229 in 2023.
Inventory is still low, but did see an 12.9% increase last year to 673 from the 596 available at the end of 2023. The homes that were put up on the market sold after 28 days, on average.
Interest rates remain a major reason why many sellers are reluctant to put their home up for sale, Hilton said.
"They're seeing the higher prices to replace their home or move up, plus they may have a pre-pandemic interest rate of 3%," she said. "Why would they jump to a six or six and a half (percent) and pay a higher price for a home?"
Hilton said lower interest rates could spark a rebound in buyer activity. The Federal Reserve held the line on interest rates last week, but Hilton said she remains optimistic about seeing rates going down later this year.
Hilton said a moderate increase in home prices is likely if the economy is stable, interest rates are lower, and the supply remains constrained as expected. But she expects the increase in price to be more around 3 to 5% on average.
The home building market is largely stagnant, Hilton said.
"We do have the new subdivision coming out in northern Peoria/Dunlap area, which we're hoping is going to be start breaking ground soon. But besides that, there just hasn't been the price product for builders. They're not willing to speculate and build spec homes now like they used to," she said.
Hilton said she's supportive of measures that could help builders, like the tax credits proposed in the city of Peoria's legislative agenda.
The main thing that could help the home real estate market rebound right now, Hilton said, is stability.
"We think the worst is over, as far as the real estate market," she said.