Indianapolis Housing Market Bouncing Back
Sales of existing homes in Indianapolis were the most since 2008
The lowest mortgage rates in decades, an upswing in hiring, fewer distressed properties dumped on the market and rising consumer confidence.
Add them up and it made 2012 the best-performing housing market in the Indianapolis area since the recession.
Sales of existing homes were the most since 2008, jumping 18.5 percent to 25,736 from the previous year. And the median price rose nearly 6 percent, to $122,000, reassuring homeowners worried about past erosion of value in their largest investment.
Real estate agents don’t need numbers to tell that times are looking up.
At the local Realtors President’s Ball on Saturday at the Indiana Roof Ballroom, “People were saying, ‘Hey, this business could be fun again,’ ” said David Caveness, senior vice president of Carpenter Realtors. “You go back to ’09, ’10, you could hardly get a smile out of anybody.”
For Sue Applegate, a veteran broker-associate in Carmel for Keller Williams Realty, the improving market is caused by more want-to-move customers in the market and fewer need-to-moves.
As a result, she says, homes listed for sale are better kept up, the mood of sellers and buyers is more upbeat and less desperate, and agents are dealing with fewer bank-owned properties and those broker-dreaded short sales (where owners owe more on their mortgage than their houses are worth).
“It’s become more of a normal situation,” Applegate said.
The 13-county Indianapolis housing market last year outperformed the state as a whole. Statewide, sales of existing homes rose 14.7 percent over 2011 to 66,516, while median prices grew 4.5 percent.
“2012 was an encouraging year in real estate for Central Indiana. Consumer interest drove the change, and month over month we saw more people in the market,” said Rick Lux, president of the Metropolitan Indianapolis Board of Realtors.
“The biggest story . . . is that homes have not only held their value but also made price gains to levels not seen since the recession began,” said Karl Berron, chief executive of the Indiana Association of Realtors. “Housing markets in Indiana have decidedly turned the corner away from the worst of the recession.”
December was the 19th straight month that metro home sales increased over the previous year. Each of the past three months has seen all-time record pending sales numbers for those months, Caveness said.
Driving much of the activity are well-to-do baby boomers electing to downsize, typically trading a large suburban home for something smaller and easier to maintain, Applegate said.
That demand has turned nicely appointed, well-kept ranches in desirable neighborhoods into hot commodities for boomers on the move.
Applegate listed one such 2,000-square-foot, three-bedroom brick ranch for sale last fall and found a qualified buyer almost instantly. “We had eight backup offers on it,” she said of the Northside house, which listed for less than $200,000.
The hottest-selling metro region was Hamilton County, where sales rose 27 percent from 2011. Buyer demand also was heavy in Boone and Hancock counties, which saw 22 percent more homes sold.
The turnaround in the housing market — new-home construction also is up from 2011 — is key to an improving overall economy, said Michael Hicks, director of Ball State University’s Bureau of Business Research.
“Homes have a huge supply chain,” he said, which feeds business to the construction industry, banking, and retailers, such as furniture and appliance stores. “This housing market over the last six months, this is as good news as we’ve had.”
Local brokerages expect things to get even better for their industry in 2013.
F.C. Tucker Co. President H. James Litten predicts area sales will jump about 10 percent and prices by 4 percent.
Carpenter Realtors is more optimistic, saying area sales could hit 30,000, which would be a 16 percent hike over last year.
Caveness said the ingredients of a strong housing market are almost all there, including historically low interest rates of just under 4 percent for a traditional 30-year mortgage.
“The glut of bank-owned and distressed properties has washed through the pipeline,” he said. “People are feeling better, and they are out there buying houses. You get a house that looks good, is priced competitively and, bang, it’s gone. We haven’t seen this in four to five years.”