Peoria Area Housing Market Outlook-Fall 2015

It has been an interesting week to say the least. Last week Caterpillar announced a series of reductions in its workforce to help it stay in line with the current reduction in manufacturing demands that they are seeing globally. The first round of reductions will be in the form of early retirement options for those that are 55-60. For some-this comes as great news as they may have been planning on retiring anyway. For others, it probably came as a shock and means that they have a decision to make-by next week-of if they want to take Caterpillar up on the offer, or stay on and face what may very likely be a nervous next few months.

We have received numerous calls from current buyers, sellers, as well as those home owners that are in the category above and are wondering what their house may be worth in the current market. Let’s talk about each of these categories.

Buyers currently in the market place fall into three categories in my opinion.

1) Those that are not affiliated with Caterpillar.

2) Those that are employed by Caterpillar.

3) Those are are deciding to get into the house search now rather than wait.

Those buyers in the first category, so long as they are filling comfortable in their price range and employment picture, may have the perfect storm to be looking for a home right now. The supply of homes in the $225K to $500K price range is very likely going to increase this fall and into winter. The fall and winter months are also traditionally the slower time of the selling season. Slower selling season, coupled with increased inventory of homes, will put added pressure on prices.

Buyers in the second category I would imagine are going to wait on the sidelines a little until the reshuffling is done at Caterpillar. I can’t blame them. While there is nothing better than getting into a terrific house at a great price, there is nothing worse than buying a home if there is any reason to have any concern about job security.

For sellers, the same rules apply that have always applied. It’s more important than ever to price your home competitively, and not just based on past sales. It’s always important to price your home for the current market as well as keeping ahead of the market. If it looks like over the next 2-3-4 months we will see an increase in the supply of available homes, and increased pressure of prices, then it’s important to stay ahead of that rather than playing catch up. As I’ve been quoted many times, it’s not a question of what is your house worth. It’s a question of what is it going to take to get it sold in the current market. It’s also more important than ever to make sure EVERYTHING is updated, clean and in the best possible showing condition you can make it. That teenagers room with the black walls, or the tiger print wallpaper you just couldn’t live without back in 1985…well…it might be time to go more neutral. It’s not necessarily about what you like about the house anymore, as much as it is a question of what can you do to make it appeal to the broadest group of buyers as possible.

I would never suggest to anyone that they should buy a home if they have any concerns about their employment outlook. It’s best to wait things out and make a big decision when you are more comfortable about the outlook. That being said, I don’t recall any time in the last few years, except maybe around 2009 when everything was going crazy in every kind of financial market, where there might be a better time to invest in a house. We have the seasonal weather slow down coming, coupled with low interest rates, and an increased supply of some very nice homes coming up, and possibly a decrease in the supply of buyers that are out there looking.

 

 

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