Market News

Home Sales & Prices Rise

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 onK 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! 

Local Sales Red Hot

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 salKes), 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.

How Buyers Pay for Homes

I came across a headline, “All Cash Buyers Dominate Florida and Midwest.”  Really?  I’m thinking you’ve got to be kidding.  I mean, who has cash to buy a new home outright?  Turns out, there’s more of that going on than you might imagine.  From 32% in Chicago, to 45% in Cleveland, 31% Nashville, to 42% of Orlando home sales and 54% of Miami’s!  That’s a lot of cash sales.  For sure, those aren’t the result of a tidal wave of working stiffs all of a sudden becoming ultra savers and stockpiling cash for down payments.  Nor have multitudes won the lottery of late.  No, a very large percentage of these purchases arose as a result of the Fed’s easy money policies.  Basically, the money moved from the Fed to the big banks, and from there to hedge funds- all at ultra low rates (like lower than anything you or I have ever seen when taking out a mortgage).  The hedge funds then bought up the bulk of the foreclosures at rock bottom prices along with some other good deals, and converted these to single-family rentals.  They’re now the biggest landlords in the country.  And the infusion of these outside funds into the home market has pushed prices higher and higher.

Here in Indianapolis the story has taken a different twist.  The percentage of cash buyers actually decreased this past year, from 26% to 22%.  I guess we must not be as attractive a marKket as some of those other places.

Meanwhile, the rest of us have bought homes the old fashioned way- with a mortgage.  Most recently, 46% of local buyers used a Conventional mortgage.  21% took out a FHA mortgage.  (That number actually surprised me as I would’ve guessed it to be higher in this market.)  Just 5% used a VA mortgage, and even fewer RD or contract financing.

If you have questions how financing might help you buy or sell a house… call, text or write.  I work harder to make good things happen!