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Local real estate market deemed stable despite drop in Q3 sales

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Despite what it called a slight drop in third quarter home sales from a year ago, the Peoria Area Association of Realtors said Tuesday that there is stability in the local housing market.

That, new PAAR President Tonya Burris said, bodes well for the future.

"We are right where we should be in some aspects, including in inventory, and we are starting to see signs of the market continuing to pick up," Burris said. "Our indicators are that we will continue to have a healthy, stable market in the Peoria region."

The association reported that there were 1,396 homes sold during the third quarter, a decline of 4.3 percent from the third quarter of 2012 when there were 1,458 homes sold. The third quarter figure was only slightly ahead of the second quarter sales of 1,390 even though the third quarter is typically the busiest of the year for Peoria area realtors.

But Burris said the fourth quarter may show improvement because there was a late influx of homes sold but not yet closed at the end of the third quarter. The Association of Realtors doesn't record a house as sold until after it has closed. There also was an 11.6 percent increase in new listings.

"We are also seeing a lot of homes getting offers right now, and in some cases multiple offers. New construction is now starting to fill the inventory gaps, as well," she said.

Burris also noted that more houses were sold in the $75,000 or less segment than any other segment, something she said is unusual but a good indicator. "That, to us, indicates those sellers are moving up in their range, which will help the inventory," she said.

However, the association noted in its report, that also was the cause for the average and median sales prices dropping during the third quarter from their levels of a year ago.

The median sales price — which means half of the houses sold were above the price and the rest were below it — was $122,000 during the quarter, an 8.4 percent decline from the third quarter of 2012. The average price fell from $156,324 to $143,778.

Inventory was down by 3.1 percent was now, Burris said, is in a range — about six months supply — that shows better stability. "This isn't a buyer's market or a seller's market right now," she said.

"In spite of the slight fluctuations downward of several factors, this continues to be a positive real estate market. Buyers are buying, sellers are selling, and lendors are lending. Inventory is still well-priced and interest rates are still at historic low levels. This remains a great time to buy or sell a home," Burris added.

While feeling positive about the fourth quarter, Burris acknowledged the government shutdown is worrisome. "Like everyone else we continue to monitor the government shutdown. We have no experience with government shutdowns and we hope it doesn't last long enough for us to find out. We have seen little impact to date. And despite the possible slowed closing process, the real estate market in central Illinois is extremely stable and positive — and the forecast for the last quarter suggests the momentum will continue," she said.

As long as the government shutdown continues, Burris said PAAR expects loans to take a little longer to process; some may be delayed longer than others. The association has been advised that Fannie Mae and Freddie Mac, (quasi-governmental corporations that securitize mortgage loans) will continue operating normally, as will their regulator, the Federal Housing Finance Agency, since they are not reliant on appropriated funds. Both Fannie and Freddie have announced relaxed procedures that will permit closings to go forward. However the relaxed requirements do not apply to loan modification re-financings, the association 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).