About one-third as many new houses are being built in the Pekin Real Estate market as compared to shortly before the recession — following a national trend of foreclosures and more houses on the market leading to less new construction.
Seventy new houses were built in 2006, and again in 2007, according to city inspection department records. But in 2008, only 29 new houses were built, followed by 24 in 2009 and 26 in 2010. Four new houses were built in the first three months of 2011.
Marvin Spiczka Construction builds new homes in Deerfield Estates, and Spiczka said he’s gone from building about seven new houses a year to five. He’s offering a $6,000 discount for anyone interested in building a home in the growing neighborhood.
“I’m trying to promote Pekin,” he said.
He has six lots left in the original Deerfield Estates phase, he said, and 12 that are ready to go in a second phase that was approved by the city this year. The city also approved the extension of the neighborhood’s main road, Petri Lane, and the plots for that second phase, which will eventually contain 28 homes.
Spiczka said credit is still tight for people interested in new construction.
“The government bailed out Fannie Mae and Freddie Mac — the government has released funds, but the banks haven’t,” he said.
In 2006 and 2007 combined, the average house in Pekin spent 65.5 days on the market. That average increased to 69 days in 2008, 77 days in 2009 and then 95 days in 2010.
The average sale price for a new home in Pekin has hovered near the $185,000 mark since 2006, while the cost of an existing home has stayed near $107,000.
The average cost of new homes in Pekin hasn’t become wildly higher when compared to existing homes like it has nationally, but data available to the Pekin Daily Times doesn’t show whether the average new home size remained consistent.
Nationally, the median price of a new home is now 48 percent higher than that of a home being resold — more than three times the gap in a healthy housing market, according to the Associated Press.
“A lot of people are saying, ‘If I can get a great deal on a home already on the market, why go through the headaches of getting a new home?’” said Mark Vitner, a senior economist with Wells Fargo. “There’s a relatively small group of people who have the credit, have the down payment and are secure in their jobs that can go out and buy new.”
Slowed by those higher prices, national new-home sales have plummeted over the past year to the lowest level since records began being kept in 1963. The government provides fresh data on new-home sales Wednesday.
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