While many parts of the country saw the cost of housing skyrocket in recent years, prices in Peoria, Illinois, had been slower. But not anymore.
Peoria’s median price for an existing single-family home jumped 19.6% in the fourth quarter compared to the prior year, the second-largest increase for any U.S. city, according to a new report from the National Association of Realtors. Peoria was one of six in the Midwest that ranked among the top 10 in the U.S. for price growth during that time period. Still, many of those Midwestern cities are quite affordable compared to other parts of the country. The median price of a home sold last quarter in Peoria was $172,400.
“Like much of the country we have a supply shortage and pent-up demand. Our builders weren’t building new homes, and now we’re extremely short on housing,” said John Kepple, a listing agent for Keller Williams Premier Realty in Peoria.
Nationally, sales prices rose in the fourth quarter in 89% of the 226 metropolitan areas the NAR tracks, compared to the previous three months. The national median single-family existing home price increased 4.8% from one year earlier to $410,100, though it dropped slightly from the previous quarter.
Across the Midwest, prices went up 8% in the past year, compared to 10.6% in the Northeast, 4% in the West and 2.1% in the South.
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While prices are rising noticeably in some more affordable markets, they keep going up in some of the most expensive ones, too. San Jose, part of California’s Silicon Valley, saw a 9.7% increase in the median price for existing single-family houses to $1.92 million.
Affordable markets
Other Midwestern cities besides Peoria that saw double-digit price gains over the past year were Fond du Lac, Wisconsin; Bismarck, North Dakota; and Cleveland, Akron and Canton in Ohio. Jackson, Mississippi, ranked first in the nation with a 28.7% median price increase.
Builders have hardly developed any new subdivisions in Peoria since the Great Recession in 2008, and the city saw a further slowdown in development when Caterpillar closed its local headquarters in 2017. That caused 3,000 of the city’s roughly 250,000 residents to relocate, Kepple said.
More recently, however, the electric car maker Rivian opened a large factory about a half-hour outside Peoria, and an area hospital just finished construction of a new cancer center. These economic developments and the city’s relative affordability are drawing newcomers.
“While recognizing many workers may not have the option to relocate, those who can or are willing to move may find more affordable conditions, especially given the wide variance in home prices nationwide,” Lawrence Yun, the NAR’s chief economist, said in a statement.