The bean counters just finished tabulating what took place in the local real estate market this past year. And (to nobody’s surprise) the MIBOR Realtor Association reported both sales and prices of single-family homes in central Indiana were on the rise.
Closed sales totaled 35,423 for the twelve months, up 10% over the previous year. The total number even surpassed the peak of the last bubble in 2006.
On the other hand, new listings were up a scant 1% in 2016. Now, you put together surging sales with flat new listings, and the resulting increase in median sales price is no surprise, rising 5% to $154,000 in 2016.
Nevertheless, Indy (and central Indiana) remains one of the most affordable places to live. Witness, US News magazine named Indianapolis #5 on this year’s list of The 20 Best Affordable Places to Live in the US and MarketCrashers.com accorded it the #2 slot on their list of Most Affordable Cities to Live In. Affordability is a great thing— for both the people living here and for the long-term health of the metro area.
On the down side, the local housing market is very tight, with limited inventory available. Houses for sale at year end numbered just 8,946 (down 14% from a year earlier). And with close to 3,000 buyers nailing down purchase contracts even in the slow month of December, that leaves buyers with limited choices. Now, if you’d like a lil’ coaching on how to successfully navigate this competitive marketplace, call me. I work harder to make good things happen!
They’re lots of misconceptions on this topic. It seems, sellers think buyers should pay for just about everything, and many buyers want sellers to pay all costs (thus reducing their required cash out of pocket). The truth is the answer as to “who pays?” is negotiable.
So, when it comes to closing costs, what exactly are we talking about? On the seller’s side are real estate commissions, legal fees, pro-rated real estate taxes, and owner’s title insurance. Sellers almost always pay the commissions; and pay the other items as well more often than not. On the buyer’s side are inspection fees, appraisal, loan fees, homeowners insurance, and escrow set-up costs. Buyers pay these almost always, unless they can negotiate to have the seller pay some or all of them. Generally speaking, sellers pay buyer’s closing costs most often on lower-priced homes and on deals where the buyer has a limited cash down payment (say, like 5% or less).
Sometimes the amount of buyer’s closing costs that seller can pay is limited by law. For example, VA loans only allow the seller to pay buyer’s costs up to 4% of the price. With FHA that number is 6% and with Conventional mortgages it is 3% if the buyer puts 10% or less down, and 6% otherwise. On contract transactions their is no limitation.
Like so many things in a real estate deal, who actually pays closing costs is negotiable. If you have questions about how to best structure a deal so it works for you in your specific situation… call, text or write. I work harder to make good things happen!
MIBOR released its’ November sales report, and it’s fair to say the market is red hot. November sales were up a whopping 23% over a year ago. To be sure, buyers had an extra incentive as mortgage rates jumped a percent in recent months, and many were rushing to meet rate lock deadlines. How rates play out going forward is a jump ball. If anyone tells you otherwise, please let me know where they got there crystal ball.
New listings were also up, but at 6% (versus the 23% gain in sales), so the inventory of available homes continued to decline. Basic supply and demand would suggest that prices should be up. And no surprise, that’s what they were. The median average sales price came in at $152,000; up 4.8% over November 2015.
I hope you had an outstanding holiday and are looking forward to a prosperous new year. Whether you’re thinking about buying or selling in 2017, let me know— I work harder to make good things happen! ‘Nuff said.