Kokomo’s Housing Market Shows Small Improvement

The findings of an Indiana Association of Realtors report were just enough to allow Kokomo real estate agents a sigh of relief last week.  Howard County had a 3.1 percent increase in 2010 home sales compared to 2009, according to the data.  The gain was less than one-tenth what it was a half-year earlier, but compared to housing markets in other mid-sized central Indiana metro areas, the Kokomo area market was not so bad.

“I was relieved to see the numbers,” said Amy Pate, executive vice president of the Kokomo-based Realtors Association of Central Indiana.  Compared to counties where the largest cities are akin to Kokomo in population sizes and amounts of blue-collar jobs — Anderson, Muncie, Marion, Terre Haute and Columbus — the local housing market was one of two that grew in 2010.  Although Richmond and Wayne County are comparable to Kokomo and Howard County, data could not be obtained by their respective Realtors associations.

The two sales increases in the group also went the opposite direction of the state’s average of a 6.6 percent decrease in house sale closings in 2010 compared to 2009, according to the report released last week.  The national average for existing home sales also dropped, going down 4.8 percent last year from the year before, according to the National Association of Realtors.  Three of the counties comparable to Howard County in size and economy — Grant, Delaware and Madison — saw home sale decreases in double-digit percentages. Vigo County fared better with a 2.8 percent drop in sales.

Muncie and Terre Haute weren’t the only college towns that experienced drops. The counties that are home to the state’s two largest universities also had housing-market declines last year.  Tippecanoe County, home to Purdue University West Lafayette, had a 5.1 percent dip in 2010 home sales. Monroe County, with Indiana University Bloomington, had a 12.3 percent drop.  Bartholomew County, with Columbus as its county seat, performed the best out of the group with an 11.4 percent rise.

Real estate experts speculated about why Howard and Bartholomew counties were the only two in the collection of mid-sized cities to see improvement.  They all offered a core theory that accredited major corporate announcements in those areas that led to improved consumer confidence.

Better than Most Like It

It’s been an improving image for the Kokomo area that helped the 2010 housing market finish ahead of 2009, even with rapid sales declines after a federal tax credit expired, Pate said.  “There was such a burst of attention and money in the economy to get Kokomo back up and running,” she said. “It may not be the only reason, but it’s part of it. You also didn’t see Obama going to those other communities.”

The state Realtors association has reiterated since mid-2010 that the sales numbers in the first half of the year and the year before were artificially inflated because of the First-Time Homebuyer Tax Credit. The credit gave up to $8,000 to people who were buying their first houses and up to $6,500 to repeat buyers.

Howard County sales from January to June 2010 were 35.3 percent higher than the same time frame a year earlier.  Home sales in the Kokomo area, and almost everywhere else in the U.S., dropped significantly every month after the credit ended.  Announcements of major investments in Kokomo, including more than $1 billion from Chrysler Group LLC, and an overall improving attitude toward the housing market has helped the area perform slightly better than others like it, Pate said.  “The biggest thing is the fact that we’ve had a lot of attention with Chrysler going back to work, and that industry has started moving again,” she said. “So we’re seeing people go back to work over time there, and then you’re seeing more money pumped into the economy.”

Better to Buy

Kokomo’s housing market also received help from the National Association of Home Builders in November, Pate said.  The organization declared Kokomo had the “most affordable” housing out of all small markets in the U.S.  Howard County homes sold for a median cost of $72,599 in 2010. It was a 5.4 percent increase over 2009, but about 35 percent below the state’s 2010 median of $112,000.

Kokomo real estate agents have described the median costs as a “good time to buy.”  That is because low demand on top of increasing amounts of foreclosures have put downward pressure on housing costs. While it has been an issue for sellers, it has been a boon for buyers.  “I think Kokomo has always offered very competitive pricing since I’ve been in the business,” said Andy Hardie, a closing manager for The Hardie Group Real Estate Co. “One advantage to living in the community is that housing is very affordable.”

At the Top

It has been a healthier unemployment rate stacked onto announcements of large investments that led Bartholomew County to have an 11.4 percent increase in home sales, said Cheryl Stuckwish, president of the South Central Indiana Listing Exchange.  The state reported the county had 8.1 percent unemployment in December. Howard County had an estimated 10.7 percent of its people out of work that same month. Howard County ranked 11th in the state for unemployment, while Bartholomew County ranked 71st out of Indiana’s 92 counties.

Columbus-based Cummins Inc., the area’s largest employer, announced two multi-million dollar investments in its home city, and it expects to grow its work force by as many as 1,000 people in the next year, said company spokesman Mark Land.  Cummins and other corporate investments in the area have bolstered residents’ courage to invest in new homes, Stuckwish said.  “I think one of the reasons we’re doing so well is that our local employment outlook is good, and our employers are hiring again,” she said. “That, of course, is very positive for consumer confidence.”

Uncertainties also eased in the Columbus area after the November elections. Many potential home buyers were waiting on Indiana’s vote on putting a homestead property tax cap of 1 percent into the Indiana Constitution. Once voters approved permanently cementing the cap, people bought more homes, Stuckwish said.  “I don’t know that the way the election went would have mattered,” she said. “People just wanted it settled.”

• Daniel Human is the Kokomo Tribune business reporter. He can be reached at 765-454-8570 or at daniel.human@kokomotribune.com.  Original article can be found at:  //www.kokomotribune.com