The number of homes for sale in the quarter was 564, compared to 1,087 in the first quarter of 2021. There were 2,174 homes on the Peoria market in the first quarter of 2020 before inventory figures began to drop.
"This is the lowest supply of houses we've ever had in this market. What that means is that buyers have very little to pick from right now," said PAAR President Ryan Cannon.
The Peoria Area Association of REALTORS® reported that 1,191 homes were sold in the Peoria area in the first quarter of 2022, compared to 1,357 area homes sold in the first quarter last year.
The average sale price for homes sold in the Peoria region in the first quarter was $159,076, up from $155,937 over the same period in 2021.
"If would-be buyers find a home that checks enough boxes they should move on it quickly," he said. The problem of continuing low inventory means homes that do go up for sale don't remain on the market for long, said Cannon. Homes averaged only 47 days on the market in the first quarter in 2022 compared to a 77 day average in the first quarter last year.
"I do think we've seen more outside interest in the Peoria area due to our affordability. You have people looking at Peoria from all over the country which has led us to having less inventory. Locally, many people have moved in the last two years as well," he said.
The U.S Home Affordability Report, released earlier this month, listed Peoria County among U.S. counties where the smallest portion of average local wages (just over 10 percent) was required to afford a median-priced home during the first quarter of this year. The report listed the national average to acquire a home at just over 26 percent.
The problem now is that a market shortage of homes in the Peoria market has created a bottleneck, said the PAAR President. "We basically have a logjam. We need more homes in the $200,000 to $400,000 category so that people can move up. That would free up inventory of homes priced between $100,000 to $250,000," he said.
"I think the message is clear: If you have a property to sell, now is still the time," said Cannon.
"Nationally, we are short of homes as a result of under-building new residences for a decade. I do think with rising interest rates that inventory will stabilize later this year," he said.
"When trying to 'convince' sellers to test the market, it's all about showing them the money by comparing current numbers with what we were looking at 18 to 24 months ago," said Cannon.
"As far as 'encouraging' the market, I've heard of different efforts over the years but, given national inventory shortages, I think a lot of those programs have cooled. Everything from tax abatement strategies to student debt relief have been tested throughout the country over time," he said.
"With the inflation data out for last month showing a rise of consumer prices in March of 8.5 percent, I think we can expect to see interest rates continue to rise in an effort to 'cool' continued inflation," said Cannon.
"This will likely lead to less home sales, but we still anticipate moderate price increases year over year. There is just a good deal of pent-up demand," he said.