For the first time in more than two years, local Realtors are optimistic about Southern Indiana’s housing market, and with good reason, according to Suzann Slayton, president and CEO of Southern Indiana Realtors Association.
“The market is up. Agents are busy. During the week they’re writing multiple offers whereas before — one and a half, two years ago — they weren’t writing any offers during the week,” Slayton said.
“The second quarter is really encouraging. Our sales are up about 35 percent [from the first quarter of this year].” From Jan. 1 to April 15, SIRA recorded 549 sales, compared to 845 sales from April 15 through July 19.
Despite those encouraging statistics, the number of homes sold and the average sales price remains lower than they’ve been since 2002, according to information provided by the Southern Indiana Realtors Association, which represents Floyd, Clark, Harrison, Perry, Scott, Crawford and Washington counties.
In New Albany, the number of homes sold from January to May was down 2 percent from the same period in 2008, and down about 30 percent from that period in 2007. Elsewhere in Floyd County, home sales for that period decreased about 1 percent from last year and 18 percent from 2007.
In Jeffersonville, the number of homes sold from January to May decreased 18 percent compared to the same period last year, and 47 percent during that period in 2007. The rest of Clark County saw a 1.5 percent decrease in homes sold from January to May of this year versus January to May of 2008, and a 29 percent decrease from the same period in 2007.
The average sales price continued to decline as well, down to $126,400 for January-June from $134,400 for the January-June period a year earlier.
“What’s holding prices down are the foreclosures working through the market. Foreclosures are generally [in the] $100,000” price range, according to Slayton, and when those numbers are figured in they lower the overall average price figures.
The area is seeing fewer foreclosures though, following a trend that’s tracking across the state and country. Indiana foreclosures were down almost 18 percent in the first quarter of 2009 compared to the first quarter of 2008, according to RealtyTrac, which tracks foreclosures around the country. Indiana is currently ranked No. 14 in the country in the number of foreclosures.
Homes in the $120,000 to $180,000 range are leading the marketplace in sales, according to Slayton.
“A lot of properties, if they are in good condition, are selling at list price or very close to list price,” Slayton said.
Anecdotal evidence like that — as well as the fact that local foreclosures and unemployment rates are down, coupled with the burst in second-quarter home sales — lead Slayton to believe the housing market is beginning to turn around.
“I gauge [the strength of the market] on talking to people in the field. They have a different demeanor now — they’re not talking about getting out of the business anymore. They’re upbeat.”
Area Realtor Steve Elmore, of The Elmore Group, gave a similar optimistic report to Realty Times in July.
“The Southern Indiana market is very stable compared to other parts of the state and country. Buyers are out and looking to buy,” Elmore said.
Slayton said the $8,000 first-time homeowner tax credit being offered by the federal government is “what’s really fueled” the recent increase in home sales and she expects it to continue increasing sales through the fall. The tax credit, which expires Dec. 1, offers first-time homebuyers a tax credit for 10 percent of the home’s purchase price, up to $8,000.
Lawrence Yun, chief economist with the National Association of Realtors, added, “It should take a few months for the market to gain momentum, but this increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit.”
The tax credit, along with historically low interest rates and an abundance of inventory, has encouraged people who were waiting to buy homes to make their move, Slayton and Yun agreed.
Still, Yun noted, “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”
Slayton said she expects the market to be strong through the fall, and then level off as it usually does in the winter months. After that, “it all depends on the overall economy. Unemployment is down, people are more confident in the stock market — I think things are looking great for the market.”
“I think right now, as we talk, the market is as hot as it’s been. An agent told me yesterday, ‘I’ve written three offers since Monday.’ Three offers from Monday to Thursday, that’s like the heyday,” Slayton said