Red-hot Illinois real estate market booming, availability and affordability limited

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PEORIA, Ill. (WMBD) — Spring is usually the busy season for realtors, but the Illinois real estate market is red hot this winter.

Trade association Illinois Realtors announced Friday, Feb. 19, real estate sales and housing prices were up 18% in January 2021 compared to the year before.

Geoffrey Hewings is the Emeritus Director of the Regional Economics Applications Lab at the University of Illinois, which provides monthly and quarterly housing and sales forecasts for Illinois Realtors.

Hewings said the surge is due to more people working from home and wanting more space. Pre-pandemic, about 5% of the workforce worked from home, and now it’s upwards of 20-25%.

“I think as a result of people feeling captive, as a result of the Covid restrictions and deciding that sharing the dining room table with two very active kids, a spouse, and trying to conduct a professional meeting, was not working, (then) so began the search for looking for more effective space,” said Hewings.

Hewings said the major issues now are affordability and availability. There aren’t many homes under $150,000 and single home construction is also down, contributing to the market shortage.

Home sales in Peoria are up 9% but inventory is low, according to Kendra Sipes, immediate past president of the Peoria Area Association of Realtors.

“We’ve had this pent-up buyer demand for most of 2020, so we started last year with low inventory. Once Covid started and shutdown started, things kind of went on hold really for about six weeks there, but buyers, you know they’re still looking. They’re still online. Most of them are eager to make moves in the market,” said Sipes.

Sipes said interest rates are at historic lows – approximately 2.74% for a 30-year fixed loan. It remains very much a sellers market, but she recommended if you’re thinking about making a move, whether its selling, buying, or refinancing – now’s the time.

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