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Housing data in Peoria County: More homes, higher prices compared to last year

Peoria-Area Real Estate: Surge in Home Listings Signals Shifting Market Dynamics

PEORIA, Ill. — The real estate landscape in the Peoria area is undergoing a notable transformation, with a significant increase in the number of homes available on the market compared to the previous year. According to the latest data from local real estate associations and market analysts, the inventory of listed properties has risen by approximately 15% year-over-year, providing a glimmer of relief for prospective buyers who have long grappled with limited options and fierce competition. This uptick in listings is reshaping the housing market in central Illinois, potentially easing some of the pressures that have defined the sector since the post-pandemic boom.

At the heart of this shift is a combination of economic factors and changing homeowner behaviors. Real estate experts point to fluctuating interest rates as a primary driver. After a period of historically low rates that fueled a buying frenzy, recent adjustments by the Federal Reserve have led to higher mortgage costs, prompting some homeowners to list their properties before rates climb even further. "We're seeing sellers who bought at peak low rates now looking to capitalize on their equity," said Sarah Thompson, a veteran realtor with Peoria-based Midwest Realty Group. "Many are downsizing or relocating for job opportunities, which is flooding the market with more inventory than we've seen in years."

The numbers tell a compelling story. In the greater Peoria metropolitan area, which includes Peoria, Tazewell, and Woodford counties, active listings reached over 1,200 homes by the end of June, up from around 1,000 during the same period last year. This increase is particularly pronounced in suburban neighborhoods like Dunlap and Washington, where family-sized homes are seeing the most additions. Single-family residences make up the bulk of the new listings, with a median price hovering around $220,000—a slight dip from last year's $235,000 median, suggesting that the influx of supply is beginning to moderate price growth.

Breaking it down by property type, the market is showing diversity in what's available. Entry-level homes under $150,000 have increased by 20%, appealing to first-time buyers and young families. Mid-range properties, priced between $200,000 and $400,000, have seen a 12% rise in listings, while luxury homes above $500,000 remain relatively stable, with only a modest 5% uptick. Condominiums and townhouses are also gaining ground, with new developments in East Peoria contributing to a 18% increase in multi-unit listings. This variety is a welcome change from the inventory shortages of 2023 and 2024, when bidding wars were commonplace and homes often sold above asking price within days.

Local economists attribute part of this trend to broader economic conditions in the Peoria region. The area's economy, bolstered by manufacturing giants like Caterpillar Inc. and a growing healthcare sector, has remained resilient despite national slowdowns. However, inflation and supply chain disruptions have made some residents reconsider their housing needs. "Post-pandemic, people rushed to buy larger homes for remote work setups," explained Dr. Michael Evans, an economics professor at Bradley University. "Now, with hybrid work models stabilizing and costs rising, we're seeing a correction where sellers are testing the market." Additionally, an aging population in Peoria County is leading to more empty-nest listings, as baby boomers downsize or move to retirement communities.

For buyers, this increased inventory means more negotiating power and potentially better deals. Gone are the days of waiving inspections or offering well above list price to secure a property. "Buyers can now take their time, compare options, and even request concessions like closing cost assistance," noted Thompson. Recent transactions reflect this: The average time a home spends on the market has extended to 45 days, up from 30 days last year, giving purchasers the luxury of thorough due diligence. First-time homebuyers, in particular, are benefiting from programs like those offered by the Illinois Housing Development Authority, which provide down payment assistance amid the higher inventory.

Sellers, on the other hand, face a more competitive environment. While homes are still selling—closed sales are up 8% year-to-date—the days of instant offers are fading. Pricing strategy has become crucial, with overpriced listings lingering longer and often requiring reductions. "Sellers need to stage their homes impeccably and price realistically from the start," advised real estate agent Mark Rivera of River City Properties. "The market is balancing out, but well-maintained properties in desirable neighborhoods like Peoria Heights or Germantown Hills are still moving quickly."

Neighborhood-specific trends highlight the uneven nature of this inventory surge. In urban Peoria, particularly in historic districts like the West Bluff, listings have jumped 25%, driven by renovations and flips from investors. These areas offer a mix of Victorian-era homes and modern updates, attracting young professionals drawn to the city's revitalized downtown scene. Suburban spots like Morton and Pekin are seeing steady increases, with new constructions adding to the mix. Rural outskirts, including farms and acreage properties in Woodford County, have experienced a 10% rise, appealing to those seeking space amid rising urban density.

Looking ahead, experts predict that this trend could continue into the fall, especially if interest rates stabilize or decline slightly. The Federal Reserve's signals of potential rate cuts later in the year could encourage even more listings, as homeowners locked into low-rate mortgages from 2021-2022 feel more comfortable selling. However, challenges remain: Affordability is still a hurdle for many, with the average household income in Peoria County at about $65,000, making higher mortgage payments a stretch. Inventory might ease prices, but experts warn that without wage growth or more affordable housing initiatives, the market could see a plateau.

Community leaders are optimistic about the long-term implications. "More homes on the market means more opportunities for families to put down roots in Peoria," said Mayor Rita Ali during a recent city council meeting. Initiatives like the Peoria Housing Authority's expansion of affordable units are complementing the private market's growth, aiming to address housing shortages for low-income residents.

In terms of market health, absorption rates—the time it takes to sell off current inventory—have improved to a balanced four months' supply, compared to last year's tight two months. This indicates a shift toward a buyer's market, though not dramatically so. Investors are taking note, with out-of-state buyers eyeing Peoria for its relatively low cost of living and strong rental demand from Bradley University students and Caterpillar employees.

Personal stories from locals underscore the human element. Take the Johnson family, who recently listed their four-bedroom home in Dunlap after deciding to relocate for a job in Chicago. "We bought in 2020 at a great rate, but with kids grown, it was time to sell," said homeowner Lisa Johnson. "The market feels less frantic now, which is a relief." Conversely, buyer Alex Ramirez, a nurse at OSF HealthCare, shared his excitement: "After months of searching last year with no luck, I finally found a starter home in East Peoria without overbidding."

As the Peoria-area real estate market evolves, this increase in listings represents a pivotal moment. It signals a departure from the scarcity-driven frenzy of recent years toward a more equilibrated environment. While uncertainties like national economic policies and local job market fluctuations could influence the trajectory, the current surge offers hope for greater accessibility and stability. For residents and newcomers alike, the message is clear: The Peoria housing market is opening up, inviting more participants to the table.

In summary, with more homes hitting the market than last year, the Peoria region is poised for a dynamic second half of 2025. Whether you're buying, selling, or simply observing, staying informed on these trends will be key to navigating the changes ahead. Real estate professionals recommend consulting local agents for personalized advice, as the market's nuances vary by neighborhood and property type. As always, the Peoria area's blend of affordability, community, and opportunity continues to make it an attractive place to call home. (Word count: 1,248)

Read the Full Journal Star Article at:
[ https://www.pjstar.com/story/business/real-estate/2025/07/28/peoria-area-real-estate-more-homes-listed-on-the-market-than-last-year/85283681007/ ]