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Home sales continued to improve in Q2

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Home sales in the Peoria area continued to improve in the second quarter, a further indication the area economy is improving, according to the Peoria Area Association of Realtors.

In a report release Tuesday the association said 1,350 single family homes and condominiums were sold during the second quarter, an increase of 10.7 percent from the second quarter of 2011, when 1,219 sales were recorded. The association said that puts sales on a par with 2009 levels.

Meanwhile, homes are selling faster than in recent years, at an average of 94 days on the market, and sellers are getting a higher percentage of their listing price. Inventories of existing homes for sale are down 33.2 percent. That takes the supply of homes available to potential buyers to 6.7 months, back to pre-recession levels, which makes it less of a buyer's market and indicating a better outlook for sellers when combined with continued low interest rates, PAAR said in a news release.

"Quarterly statistics indicate that the market is leveling off, with sales going up, inventory and days on the market going down and pricing power coming back," the association said.

The average sales price rose by 5.8 percent in the second quarter of 2012 to $144,290, compared with $136,406 in the second quarter of 2011. The median sales price for homes in the Peoria area increased 7.5 percent to $121,500, from  $113,000 a year earlier.

The association said statistics for June reinforce the trend as the average sales prices increased for the sixth straight month to $152,742 and the median price increased 6.6 percent to $125,000.

Sales in June were up 12.9 percent from June 2011 and inventory was down 24.1 percent.

"As home sales continue to rise and the inventory goes down, the 'absorption rate' stabilizes," said Laura Martin, president of the association. "In other words, the numbers of buyers and sellers in the market is nearly balanced at a 6.7 month supply of houses. A 5 to 6 month supply of properties equates to neither a seller's nor buyer's market. This balance is indicative of a continuing economic recovery and reflects the improving jobs outlook," she said, noting that the area unemployment rate dropped to a low of 7.6 percent in May.

"Another contributing factor to growth in home sales is the scarcity of rental properties, which has pushed rents up," Martin added. "For many people a mortgage payment will actually cost less per month than rent. Contributing to the affordability of mortgages are continued low interest rates. The Fed has vowed to keep interest rates around 4 percent through mid-2013. So all the elements of home ownership, jobs and low interest rates, are present.

"In central Illinois, this continues to be a good time to buy a home, and represents an improving outlook for sellers." Martin 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).