The National Association of Realtors recently announced that the inventory of unsold homes increased nationally from 7.3% to 1.32 million from June to July – equivalent to 2.6 months of the monthly sales pace.
When we look at the Peoria market specifically, we see a similar trend to the national market in that inventory is rising and demand is cooling off.
However, with the market slowly – and it really is quite slowly – stabilizing, we have to remember that it’s stabilizing at very low inventory levels, so even with more homes for sale, the eventual “balanced market” could take some time. There are projections that Peoria will possibly see a more even market in the next three to five months if supply continues on this trend and demand continues to cool off. That being said, it is important to note that Peoria owner-occupants are having a tough time affording this new baseline of home prices, even with the low interest rates.
As NAR reports, existing-home sales rose 2% on a seasonally adjusted annual rate from June to July, with no sales declines showing in any regions, including Peoria. Add to that — the median existing-home sales price rose at a year-over-year pace of 17.8%.
This can be tough for a lot of people searching for a home right now.
We have seen prices flatten a bit recently, which will help those buyers who are already in the fight to purchase a home, but many home buyers, especially the buyers in the 400,000 range and less, have already been priced out of the Peoria home market.
In Peoria, the rental market is a similar story in that there are just not enough homes and certainly not in the affordable ranges for average incomes. The price for a nice rental in a good location is extremely high.
The experiences that individuals and families who are left “homeless” or feeling desperate because their landlord decided to either sell the home they were in or increase the rent by $500 or $600 dollars more than the previous rental rate is heart-breaking at times.
Many tenants feel helpless when they can’t afford the increases of their rental rate but don’t have the option to buy a home, either. Until there are more affordable homes and until there are more affordable rental options, those tenants are forced to move elsewhere.
As a Realtor, it feels like we can be compared to a weather forecaster in that we can tell you how things look for the next week to 10 days based on patterns we are seeing, but beyond that it’s an educated guess. The patterns show a sustained strong seller’s market for the short term, but an eventual balancing between seller’s and buyer’s market, albeit slowly.
One pattern I am seeing is more and more advertising coming across my email for home builders and I-buyers. That has not happened in a while. That tells us that they are feeling those “winds of change” and need to amp up their marketing to bring buyers back in through their doors.
While that might not seem like a pattern of change to many, it is definitely an indicator that they are seeing a shift in their markets. I can always tell when home builder advertising and incentives start increasing that they are anticipating a weakening in demand.
The overall Peoria forecast, in this Realtor’s opinion is that the housing market will always go up and down, but the desirability will remain strong, specific neighborhoods will continue to be sought after, and migration from other cities and other state’s will increase over the next year and beyond. Peoria remains one of the “hottest” markets in Maricopa county — and there are so many very good reasons for that high demand.
Editor’s note: Rebecca Durfey is a Peoria-based Realtor with Keller Williams Realty Professional Partners.