It was the same old story in the Peoria-area housing market in the third quarter of 2023.
Sales were down and sale prices were up. Both were the result of low inventory, which began during the COVID-19 pandemic and hasn’t changed.
“We thought the housing market in our area would take a hit during the pandemic, but our phones were ringing off the hook with people wanting to buy a home,” said Bill McCarthy, president of the Peoria Area Association of Realtors.
About 400 homes are on sale these days in a typical month in the Peoria area, McCarthy said. Compare that with the pre-COVID inventory of about 1,700 to 1,800 homes for sale.
Two other factors are impacting Peoria-area home sales, McCarthy said. High inflation has slowed home building and high interest rates are discouraging some prospective home buyers.
Peoria-area home sales were down 8.5 percent in the third quarter of 2023 compared to last year. There were 1,663 home sales in the third quarter this year and 1,817 home sales in the third quarter last year.
Average home sale price in the third quarter this year in the Peoria area was $188,521 a 10.7 percent increase from the third quarter last year. Average home sale price in the third quarter of 2022 was $168,334.
For the first nine months of 2023 — the third quarter — Peoria-area home sales were down 12.5 percent compared to the first nine months of 2022. There were 4,501 homes sold this year compared to 5,143 last year.
After the third-quarter numbers were calculated, the home sale trends continued in October in the Peoria area, based on PAAR’s monthly statistics.
Compared to October 2022, new listings in October 2023 fell 7.7 percent, pending sales fell 13.6 percent, closed sales fell 23.2 percent, average sale price rose 5.3 percent from $158,796 to $167,230 and inventory fell 27.1 percent, from 905 to 660.
On the flip side of the Peoria-area home sales story, “this is good time to sell,” McCarthy said. “A home normally will be on the market just 21 days if it’s priced properly, in good condition and in a good location.”
The Peoria area isn’t bucking national trends when it comes to home sales.
“The persistent lack of available homes on the market will make the dream of homeownership increasingly difficult for younger adults unless the housing supply is significantly boosted,” said Lawrence Yun, chief economist of the National Association of Realtors.
Yun also believes it’s time for the federal government to take action.
“With consumer inflation becoming more manageable, the Federal Reserve needs to consider cutting interest rates,” he said. “In turn, Congress must consider incentives to boost housing supply and inventory so that more Americans can participate in wealth accumulation.
“The housing market shouldn’t be accessible only to those who are paying in cash nor become a playground for the wealthy.”
According to the NAR, more than 82 percent of metro markets across the country (182 of 221) saw home sale prices rise in the third quarter of 2023 compared to the third quarter of 2022.
Among the markets with the highest third-quarter year-over-year price increase was Kankakee, at 12.6 percent.
Home sale prices rose 5.2 percent in the Midwest in the third quarter this year compared to the third quarter last year, according to the NAR.