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Area home sales cool in third quarter

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Home sales were off more than 10 percent in the third quarter from a year ago, which brought down year-to-date numbers, as well, according to the Peoria Area Association of Realtors.

Third quarter home sales were off 10.2 percent from the third quarter of 2015 pace while year-to-date sales are only down 2.2 percent, the association said in a news release Friday.

PAAR reported there were a total of 1,529 closed home sales in the third quarter, down from 1,703 reported in the third quarter of 2015. Year-to-date sales through September totaled 4,228, down from 4,324 sales reported through the first three quarters of 2015.

“It is not unusual for us to see a seasonal slowdown at this time of year. Demand has remained steady through the first three quarters of 2016, despite a slight reduction in inventory. The price range that tended to sell the quickest in September was the $125,000 to $175,000 range at 71 days,” said Jana Heffron, president of the Peoria Area Association of REALTORS®. 

The median home sale price for the Peoria area in the third quarter was $123,500, down just 1.1 percent from $124,900. The average sales price was $145,066, down 3.8 percent from $150,804 in the third quarter of 2015. The inventory of homes for sale was 2,976 in September, off 0.6 percent from 2,993 in September a year ago.

“Fall remains one of the best times to shop for and purchase a home. There is generally less competition from other buyers for available houses on the market and sellers may be ready to negotiate and eager to move their property before the holidays get here and winter sets in,” said Heffron.

“Some bright spots for home sale activity show East Peoria up 5.0 percent, Peoria Heights up 10.8 percent, Tazewell County up 0.9 percent, Edwards up 26.2 percent and Washington up 0.7 percent year-to-date. The city of Peoria home sales have remained relatively steady with sales down just 0.9 percent year-to-date with 1,214 home sales reported,” she said.

The average number days on market stood at 78 days in the third quarter; the same number of days reported in the third quarter of 2015. The month’s supply of inventory increased 4.6 percent to 6.8 months from 6.5 months in September 2015. 

“On a positive note as we move into the last quarter of the year, mortgage interest rates continue to remain very attractive to buyers at near record lows. But, they may not stay at these levels for long,” said Heffron.

“While the Peoria area economy continues to remain stable through our diversification in the employment sector, recent announcements regarding cutbacks by Caterpillar in this quarter may have tempered buying patterns not only in housing but in other areas. PAAR continues to work with local government, private and public organizations including elected officials to promote and expand a strong regional economy and to accentuate and attract the development of new businesses to our area. These integrated, pro-business partnerships are working to develop programs for the betterment of the Greater Peoria area. We are excited to be a part of these initiatives that continue to build upon collaborative efforts in our community.”

According to Freddie Mac, the average rate for a 30-year, conventional, fixed-rate mortgage was 3.46 percent in September, down from 3.89 percent in September 2015.

“While millennials and first time buyers continue to be a driving force in the market, the second largest share of buyers behind married couples in the residential real estate market is single female homebuyers that account for anywhere between 15 and 20 percent of all home purchases,” said Heffron. “The property type that gained the most inventory was the condo-townhouse attached segment that gained 5.4 percent in September. We are seeing a growing demand for construction of condo-townhouses that are attractive to all homebuyers be it first-time buyers, starter families or even individuals looking to downsize into smaller homes.”

According to Dr. Lawrence Yun, chief economist for the National Association of REALTORS®, “Very affordable mortgage rates and strong job gains among young adults should be translating into a higher rate of homeownership. It’s not, and a result, sales to first-time buyers remains stuck below a third of all sales.” In the latest NAR Housing Opportunities and Market Experience survey, there is a misconception about how much of a down payment is needed to buy which could be unnecessarily delaying some qualified young adults from entering the market.

“With the growing population of 85 million millennials who aspire to be homeowners, the availability and promotion of more mortgage and low downpayment options including additional inventory of homes to sell at entry level price ranges could help an increasing share of these renters achieve homeownership,” said Heffron.

The National Association of REALTORS® is predicting existing-home sales to reach 6 million in 2017, higher than its 5.8 million forecast for this year.

Peoria Area Association of REALTORS®
3rd Quarter Home Sales, Average & Median Prices

Home Ave. Sales Median 2nd Qtr
Sales Price Sales
2016 1,529 $145,066 $123,500 1,710
2015 1,703 $150,804 $124,900
2014 1,525 $150,788 $125,000
2013 1,482 $142,010 $120,000
2012 1,458 $156,324 $133,240
2011 1,267 $146,937 $124,000
2010 1,028 $140,384 $115,000
2009 1,336 $140,921 $120,000
2008 1,569 $146,118 $117,000
2007 1,669 $146,492
2006 1,742 $140,808
2005 1,786 $133,301
2004 1,649 $126,258
2003 1,575 $118,198
2002 1,406 $111,098
2001 1,341 $110,403
2000 1,255 $105,272