News
Home sales 'brisk' in Q1
- Details
- Published on Tuesday, 21 April 2015 13:19
- Written by Paul Gordon
Home sales in the Peoria area were brisk in the first quarter, according to the Peoria Area Association of Realtors.
The association reported Tuesday that sales were 6.7 percent higher than in the first quarter of 2014 and the median sales price also increased.
There were 831 homes sold during the first three months of the year, compared with 779 in the same period of 2014. The median sales price was up 2.9 percent, from $105,000 to $108,000, the association said. The average sales price, however, was down slightly from $135,023 in the first year of last year to $134,689.
PAAR President Phil Harvey said the association already anticipated 2015 would be a good year, but the confidence instilled by the announcement in February that Caterpillar Inc. will build its new headquarters downtown helped, as well.
“The announcement in February by Caterpillar, Inc. to maintain and expand its global headquarters in Peoria is great news for the local area economy and housing market," Harvey said. "This gives a definite confidence boost to many Peoria area residents who may have been waiting for this formal announcement before making a homebuying or selling decision.”
PAAR said home sales activity for March was up 22.5 percent from a year earlier.
“We expect moving forward into the later part of spring and summer the Peoria area will continue to report strong returns in both buyer interest and home sale activity, as long as the labor market, and overall economic outlook conditions improve,” Harvey said.
The association reported that the March 2015 Fannie Mae National Housing Survey showed that the share of consumers who believe now is a good time to sell a home reached a new survey high of 46 percent, narrowing the gap with those reporting it is a good time to buy, signaling a more balanced housing market.
“We need additional inventory so that the market can keep pace with the stepped-up demand on the part of buyers who are looking for the right properties that meet their price and feature specifications. Homes priced below $130,000 are a hot commodity and especially for those first-time buyers who are just entering the market,” said Harvey. “The spring selling season has arrived and those sellers who are looking to move up should investigate placing their home on the market with a REALTOR®. Potential sellers need to do that spring cleaning and transition their home to move-in ready status as there are many buyers out there in the serious house-hunting mood.”
For the first quarter of 2015, there were 1,069 pending home sales reported, up 5.8 percent from 1,010 pending sales reported a year ago, the association said.
Inventory of homes for sale rose slightly up just 1.6 percent to 2,208 listings in March compared to 2,173 listings on the market in March 2014. Also, March had 721 new listings, an increase of 12.8 percent increase over 639 new listings reported in March 2014.
Month’s supply of inventory dropped slightly 1.8 percent to 5.4 months from 5.5 months, indicating the demand is increasing relative to supply, the association said.
Citing a National Association of Realtors study that said housing rental prices are climbing faster that income rates, Harvey said those renters who can afford to buy a home should get into the market.
“Renters who are financially able to buy should be investigating their options now to make their move to purchase a home as a tangible financial investment in their future,” he said. “For first-time buyers there are many new downpayment mortgage options available to meet their increased demand.
“The reduction of the FHA's monthly mortgage insurance premium from (1.35 percent to 0.85 percent) is likely to be an incentive for homebuyers. Both Fannie Mae and Freddie Mac have reinstated low 3 percent down payment mortgage programs early in 2015,” said Harvey.
On March 3, the Illinois Housing Development Authority announced a new mortgage program for first-time home buyers and repeat buyers called @HomeIllinois. The program provides $5,000 in down payment assistance to buyers with a customizable 30-year fixed rate mortgage.
There are maximum income limits and maximum purchase price limits to obtain a mortgage under the program. For the Peoria and surrounding area, the maximum income limit is $69,500 for households of 2 or less and $79,925 for households of 3 or more. The maximum purchase price limits are $265,158 for a newly constructed home, $265,158 for an existing home and $339,456 for a two-unit property.
Buyers must contribute $1,000 or 1 percent of the purchase price whichever is greater and must live in the home as a primary residence. Individuals must also complete homebuyer counseling (online or in-person options available). Learn more at @HomeIllinois.
The Freddie Mac April 2015 U.S. Economic and Housing Market Outlook also reports to expect mortgage rates to drift slightly higher over the next six months, increasing more around the end of the year. The average rate on a 30-year fixed-rate mortgage for the North Central Region, according to the Federal Home Loan Mortgage Corporation (Freddie Mac) was 3.75 percent in the month of March, down from 4.36 percent in March 2014 and up from 3.68 percent in February, the association said.
"Delaying your purchase can raise the likelihood you might be paying at a higher interest rate as time moves forward into the later months of the year,” said Harvey.
