HANCOCK COUNTY — No one can blame consumers for being overly cautious about anything monetary after the swift kicks they’ve taken as a result of the Great Recession and a slower-than-normal recovery.
But the newest housing market update might be a sign that things are looking up.
Housing data released this week for September through November 2012 shows an increase in closed and pending home sales in Hancock County, according to a report jointly released by the Metropolitan Indianapolis Board of Realtors and the Indiana Association of Realtors. The report builds on a trend that started last year.
“November was a great month for both buyers and sellers,” said Debbie Morris, 2012 MIBOR president. “Home buyers enjoyed the historically low mortgage rates and still-affordable prices, while sellers enjoyed increased sales, less competition and faster market times.”
The number of closed sales in central Indiana increased 25.4 percent in the three months ending in November 2012 when compared to the same three-month period in 2011. In November alone, closed sales increased by 34.5 percent. Pending sales increased by 20.9 percent in the three months ending in November.
All the metro-area counties improved their home sales figures by varying degrees. Hancock County was well up in all categories. New listings increased by 9.8 percent and closed sales by 25 percent. Median and average sales prices also increased.
Now that the country’s economy has not fallen off the fiscal cliff, local Realtors and builders say 2013 is shaping up to be a solid year of local economic recovery.
“Housing usually leads recovery, followed by commercial, said local Realtor Kathy Hall of Century 21. “We need to continue to see good jobs created and balanced federal budget.”
The new jobs announcements in Hancock County toward the end of 2012 “have absolutely helped the market” already, Hall said.
In her 22 years as a Realtor here, Hall said, she has seen the good, the bad and the ugly of the housing market, and the recent trends make her as hopeful as she’s been in a long time for buyers and sellers.
The one local number that is down is the months’ supply of inventory, which decreased almost 26 percent from September through November. That indicates a lack of balance between sales of owner-occupied homes and foreclosures, Hall explained. In this case, the number of sales of foreclosed homes has radically decreased. Those typically sell at a lower price, which drags down the sales prices of owner-occupied homes.
While Realtors like to see more of a balance between the two, the fact that the owner-occupied homes currently do not have as much lower-value competition means they are getting more of their asking price now than in the past few years. And low interest rates are convincing buyers to bid on those homes.
Another thing helping the housing recovery is that Indiana’s housing market didn’t fall as far during the recession as those in some other states, so it doesn’t have as far to climb to reach recovery, even though local sales were at their peak at the beginning of the recession.
“In the Midwest, we only saw a 3.5 percent change in market value year to year,” said Hall. “Looking from top of market in 2003 to the bottom in 2008 we had a total drop in value of only 20 percent. In other parts country, they were looking at 50, 60 and 70 percent. We had more conservative changes because we are more conservative people who didn’t get themselves in as much trouble. So our market is going to recover first. Overall, these are very positive signs.”
Home builders also see a light at the end of the tunnel, according to Dave Parish of P&W Development.
“Last year was better than year before, which was a very hard year. Last year was hard but not as bad,” Parish explained. “I’ve been talking to people who look at this coming year as a breakout year, so I think there’s a lot of pent-up demand, and people are finally getting to the point where they are more optimistic that things will get better.”
For those who are considering building a home, the time was never riper than it is right now, Parish said.
“The cost of labor and materials is down. And interest rates can’t get any better. It’s a perfect storm for those who are in a position to build.”
Parish said the recession had the same culling effect on the building industry as an ice storm would have on trees. That is also good news for building family homes.
“We had burned up a lot of inventory and had probably oversaturated the market with subdivisions and new or model homes. We’ve thinned the ranks out. We lost 50 percent of our members who went out of business.”
The builders who remain “are pretty solid, and I guess that’s kind of good news. Customers that are out there are looking to (builders who are) more solid, and that’s what they’ll get.”