Home sales down a little in Q1, but optimism remains up

The wild weather of March wreaked some havoc on a major piece of the local economy, but it did not hamper optimism for the remainder of the year, officials with the Peoria Area Association of Realtors said Tuesday.

Home sales were off a touch in the first quarter when compared to the first three months of 2012, but the association said activity is high as the weather strives to become more spring-like and tighter inventories are resulting in multiple offers in some parts of the area.

"We say the year is off to a slow start, but really the closed sales in the first quarter were only off by 2 percent. We think it was a fine first quarter," said John Purple, president of the association's board.

"Realtors are very busy right now and have been for a while. In fact, they were surprised to hear that sales numbers were down," said Dallas Hancock, the association's executive director.

There were 911 homes sold in the first quarter, compared with 932 a year earlier. They were up slightly, from 240 to 245 in January (which was still mild) but fell off in both February and March when there was more snow and colder temperatures. March sales were down from 405 in 2012 to 386, the association said.

"We're talking a total difference of about 20 houses. Considering the weather, that isn't much at all," Purple said. "The unseasonably warm winter last year combined with pent-up demand and that got last year off to a good start. This year it was colder and wetter and that made a difference."

Prices were down, as well. The median sales price for homes in the Peoria area was down 10 percent to $102,000 compared with $113,375, but about the same as the $102,500 from the first quarter of 2011.

For the first quarter of 2013, pending sales were down 2.3 percent and closed sales down 2 percent, compared with the first quarter of 2012. Months-of-supply was down 32.9 percent to 4.9 months, indicating that demand increased relative to supply, the association said. The percentage of asking price, 89 percent, was about the same as last year.

Hancock said she believes prices were lower because houses that had been on the market a while sold and for prices below initial asking.

Purple said the association is seeing area inventory of available homes tighten, which has brought the months-of-supply down to 4.9 months. That, he said, tends to push the market more toward a seller's market.

But knowing the right price to put on a property isn't easy, Purple said, "When the market was down in 2009, it was a real problem because there were as many sales to do comparisons on. Now we're seeing more comps and it is easier to arrive at a price."

Hancock added that if a house is priced right, "it becomes a beauty contest. That's why we've seen multiple offers on some properties. But knowing what price to put on a house often comes down to the realtor's professional gut feeling."

Purple said he believes momentum is moving forward, with realtors reporting activity and new construction picking up again. The latter, he said, will help fill some of the inventory void. "If the first quarter numbers are any indication, and the inventory increases as it typically does this time of year, it should prove to be a winning combination." he said. "The mortgage interest rates remain very appealing, and that combined with rising rents and a lack of rental inventory continues to support a housing recovery."

Hancock said potential buyers need to be prepared as well as sellers if the market remains tight. The association is hosting to free home buyer's seminars this week, from 6 to 8 p.m. Thursday and 10 a.m. to noon on Saturday. The seminars are at PAAR offices, 7307 N. Willowlake Court in Peoria.

Topics covered at the seminar will include obtaining a mortgage, down payment assistance programs, using a real estate agent, why get a home inspection and understanding a credit report. Attendees will have the opportunity to receive a free, confidential credit report.

"This program is being offered because many buyers are under the impression they won't qualify for financing or are hesitant about the entire process, and may be missing a perfect time to buy because of the still historically-low interest rates," she said.

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).