In the years since heavy machine manufacturer Caterpillar decided to move its corporate headquarters from Peoria to the Chicago suburbs, the River City’s housing market has become the nation’s leader in "zombie homes."
In February, a report from Moody’s Analytics and the Illinois Commission on Forecasting and Government Accountability hinted at Peoria’s economic weakness and the growing foreclosure issues.
“Peoria’s proportional inventory of homes in foreclosure is the fourth highest in the Midwest and approaching 2008 levels,” the report said. “Local single-family prices are lower than a year ago, putting Peoria within the bottom 3% of metro areas nationally.”
Attom Data Solutions recently released its third-quarter foreclosure data, which showed 16.5 percent of Peoria's residential homes were vacant, bank-owned foreclosures, or what Attom calls "zombie homes." The next highest rate was Wichita, Kansas, at 9.5 percent. The national average was 3.2 percent.
While Caterpillar still employs more than 12,000 people in the Peoria area, the relocations and layoffs from Caterpillar are affecting the local housing market.
“People thought they could hang on, make their payments and do this and do that and now eighteen months to two years later, they’re struggling and they cannot anymore,” said Marilyn Kohn, a real estate agent who has certifications to specialize in not only foreclosure homes but also high-end homes that she said have been sitting on the market longer.
“I’m thinking that’s probably why it picked up in 2019,” she said.
The Peoria Area Association of Realtors, which has said the area’s home market has been on the uptick, did not respond to repeated requests for comment.
To grease the gears of relocated employees’ homes selling, Caterpillar offered monetary incentives, but a spokesperson wasn’t immediately available to provide up-to-date statistics on how many homes have been sold using the corporate incentive. The program ended last December.
Kohn said the sudden flood of inventory when CAT’s corporate personnel began to migrate to the Chicago area had a significant impact on the middle to higher-end properties.
“In a marketplace like ours that normally has 2,100 to 2,200 homes on the market, all of a sudden we had 3,200 homes on the market,” she said.
The COGFA report also signaled Peoria, a market more reliant on manufacturing, would see greater negative effects from the ongoing tariff wars between the U.S. and other countries.
“Peoria is having a tougher time building on meager gains from the cyclical upturn in manufacturing. Factory output is climbing and manufacturing and its downstream industries are responsible for all of the net job creation in the last year. Other industries, especially those that rely on consumer demand, are bleeding jobs, leaving total metro area employment flat,” the report said.
In terms of population loss, U.S. Census data shows Peoria’s total population declined by 3,437 people in the 12 months that ended in July 2018.