Area home sales steady in second quarter

Home sales rose half a percentage point in the second quarter from a year earlier and are 2.2 percent higher for the year, according to the Peoria Area Association of Realtors second quarter report issued Thursday.

There were 1,710 sales in the second quarter in the Peoria region, up from 1,702 from the April-June period in 2015. That brought year-to-date sales from 2,678 through the first half of the year, compared with to 2,621 through June 2015, the association said.

Sale prices were down, however, both on a median and average comparison. The median sale price in the second quarter was $121,450, down 4.4 percent from the median price of $127,000 in the second quarter last year. The average price declined 5.6 percent, from $154,556 to $145,878.

But time on the market improved from 92 days to 86 days.

“We have had a steady pulse of activity in terms of home sale activity in the second quarter driven in large part to the incredibly low interest rates we have been experiencing. The end of the second quarter marks the height of the summer real estate market with buyers scrambling to make their purchases and get moved before fall. To date, the 2016 market has not been disappointing for many buyers seriously looking to buy a property,” said Becky Peterson, president of PAAR.  “We are seeing a larger share of first-time buyers purchasing the lower and mid-priced inventory which contributes to a lower median home sale this quarter.”

Listing activity was down 4.2 percent to 2,829 active listings compared with 2,953 listings in the second quarter 2015. But, there was an uptick in new listings during the month of June to 947 from 935 in May 2015. The month’s supply of inventory dropped to 6.2 months, PAAR said.

“The overall inventory crunch is still in play, but we are beginning to see an increase in new listings on the market to help boost inventory levels and we are hopeful that continues into late summer,” Peterson said. “Inventory was getting thin in certain price ranges especially at the lower end of the market where buyers are seizing up available properties.”

There was good news for potential buyers. For one, the U.S. Labor Department reported that job growth bounced back in June when 287,000 jobs were added nationwide, after two consecutive months of losses. This was the largest gain since October 2015.

“Good news for homebuyers is that interest rates remained low beyond all expectations and have dropped even further recently after the Brexit vote. The Brexit economic impact could bring lower interest rates, increased demand for real estate from foreign investors in the U.S. and potential job creation,” said Peterson.

A 30-year fixed mortgage rate average 3.41 percent as of July 7, the lowest in more than years.

Peterson said the low rates is boosting the purchase power of homebuyers.

“First time buyers, millennials and baby boomers are all seeing the opportunity to borrow money at these ultra-low mortgage rates to include real estate as part of their assets,” she said. “With the Peoria area inventory levels dropping those who are hedging on whether now is a good time to sell and purchase a new home should look at this time as an opportunity as there are buyers who are hungry and searching for more properties on the market. We should see a healthy number of sales in most price ranges in the next few months.”

Peoria Area Association of REALTORS®
2^nd Quarter Home Sales, Average and Median Sales Prices

About the Author

Paul Gordon is the editor of The Peorian after spending 29 years of indentured servitude at the Peoria Journal Star. He’s an award-winning writer, raconteur and song-and-dance man. He also went to a high school whose team name is the Alices (that’s Vincennes Lincoln High School in Indiana; you can look it up).