Inventory Shortage Continues with Homes Spending Less Time on the Market
Home sales totaled 5,807 through September of 2021, topping the 5,078 homes sold through the third quarter in 2020. “I would anticipate 2021 will surpass 2020 in closed sales but the fourth quarter will be dependent on new inventory coming on the market,” said PAAR President Ryan Cannon.
“If you look at inventory, we had 36 percent fewer homes on the market in the third quarter of 2021 compared to the third quarter last year (1099 in 2021 vs 1737 in 2020). Historically the third quarter performs lower than the second every year,” he said.
Third-quarter home sales were down 8.1 percent over the same period last year. PAAR records indicated that 2,117 homes were sold in the third quarter this year compared to 2,245 homes sold in the same quarter in 2020.
The average sale price on homes sold in the Peoria area for the quarter was $162,108, up from $142,069 in 2020.
Homes are also selling faster this year than last. In the third quarter, homes averaged just 25 days on the market compared to 60 days on the market over the same period last year.
Cannon said there was no easy answer to the inventory problem. “The inventory shortage is a national issue. We’ve been under-building for over a decade,” he said.
“Since interest rates have been at all-time lows for over a year, I’d say when people start to consider refinancing in 2021 or 2022, they may consider just upgrading to a new home. I do think that when supply chain issues and the pandemic end that inventory will open up more,” said Cannon.
“We still need inventory. If you have a property to sell now is the time. Many often think the fourth quarter isn’t an ideal time to list but in this market that is not true. If you have been holding onto a second home as an investment, you’re in a perfect spot to get top dollar now for that property,” he said.
“Review the contract and contingencies with your REALTOR® before even starting your house search so that when you find ‘the one’, you understand the process. Also make sure you’re pre-approved with a lender. Be patient in your search but also be prepared to move quickly. A buyer likely won’t have much time to ‘think about it’ in this market, so if it checks all the boxes you need to move quickly,” said Cannon.