Home sales remained stable in 2013
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- Published on Monday, 27 January 2014 14:51
- Written by Paul Gordon
In a still-shaky economy, stable is good when it comes to home sales in central Illinois, said officials of the Peoria Area Association of Realtors.
That was basically what 2013 brought: Sales increased by just 18 houses, or 0.4 percent, from 2012, but it marked the third consecutive year sales increased, regardless of the amount.
That along with other encouraging signs has Realtors feeling positive about 2014, said Phil Harvey, president-elect of the Association.
"We like stability and in our eyes, this represents slow yet steady growth. We're pleased with the results coming off the strong gains (17.1 percent) in 2012," Harvey said Tuesday in a news conference at PAAR offices.
There were 4.946 houses sold in 2013, up from 4,928 sold in 2012 and 4,210 in 2011.
The key to the gain was that 398 homes were sold in the fourth quarter, 18 percent ahead of the 327 sold in the final three months of 2012. Some of that fourth quarter gain, however, was the result of victims of the Nov. 17 tornadoes that heavily damaged parts of Washington, East Peoria and Pekin buying houses already on the market instead of rebuilding.
"The dramatic impact of this continued stability is clearly seen when you look back seven years," Harvey said. "While not quite back to 2007 levels (when 5,820 homes were sold), at a minimum the market has stopped the downward trend we saw for five years between 2007 and 2011, a trend that was only partially alleviated by the boost from tax credits. 2012 was a turning point in central Illinois, with significant recoveries in nearly every housing statistic, and 2013 maintained this trend."
Harvey said the Association finds encouragement in the fact the average selling price declined in 2013, from $146,292 in 2012 to $141,215. The median price dropped from $121,900 to $118,000.
The reason for the decrease is that more people were looking for homes in the "less than $75,000" range, which he said signifies there were more first-time buyers in the market.
"That means there will be sellers moving up into the higher ranges in the near future, so we should be seeing some activity. This is an excellent time to be looking," he said.
Harvey said mortgage interest rates are still low enough to be attractive to buyers, though obtaining a loan is not as easy as it was a few years ago, before the housing bust that swept the country. "A few years ago you only had to have a pulse to get a loan. Now you need to qualify with good credit. But there are loans available for those who do qualify," he said.
Regarding the impact of the November storms on area real estate sales, Harvey said it is too early and difficult to estimate what the ultimate effect will be. It is likely there will be a lot of housing construction activity starting this year as rebuilding takes places in the effected community, which could be a boon to the construction industry, but he said it could take several years for recovery to be complete.
Other areas who have in the past experienced devastation from tornadoes have found that 20 to 25 percent of the victims choose not to rebuild their houses; rather many leave the area or choose instead to buy another house on the market.
"We know many have already done that," he said.
Overall recovery of the housing market has been sluggish of late, but Harvey said the Association is confident it will pick up. The available inventory is down but there are good houses on the market, he said.
"We think recovery is occurring because there is a lot of pent-up demand. Another factor is that basically, real estate comes down to job. The local job market has been sluggish but we are seeing signs it is picking up. So we think the recovery will be sustained in 2014," he said.
Other highlights from PAAR's 2013 results include:
- Inventory was 2,111 homes on the market at the end of the year, the lowest number since 2007 and a 3.6 percent decrease from 2,190 on the market at the end of 2012.
- Part of that is because homes are staying on the market for less time before selling. In 2013 a home remained on the market only an average of 82 days, 15.5 percent better than the 97 days it took, on average to sell a house in 2012.
- The largest per-category increase in Decembe was in the "less than $75,000" category, which saw a 10.2 percent increase in activity. The $400,001 to $500,000 category saw the largest drop in activity, 36.3 percent.
