A 13-Month Trend Was Just Broken In The Southern Indiana Real Estate Market
For a quick summary of this article, click to watch the video where I talk you through the charts. For all the full details and analysis, keep reading.
At the 812 Living Group, we track real estate data in order to spot local and national housing trends that may provide useful information to our clients during the home buying and selling process. Please note some of these trends can be attributed to seasonal patterns, national and regional economic forces, and/or issues specific to our local market. Here’s what you’ll learn in this article:
The current state of the Southern Indiana real estate market.
What current mortgage rates are today and our best guess on where they will trend the rest of the year.
Opportunities and challenges for buyers and sellers.
And a link to our guide for how to prepare to buy or sell in this current market.
The Summer of 2021 has continued to be a red hot seller’s market by nearly every measure. With the economy mostly reopened for business and free flowing federal spending continuing, the demand for housing remains high with seemingly no end in sight. While the last 4-6 weeks we have seen a slight bump in the number of homes coming up for sale, pent up buyer demand still remains strong.
As is typical, mortgage rates vacillated up and down over the last few months as they often do throughout the course of a year, but both the 30-yr and 15-year mortgage rates have had an extended stretch of generally falling rates with the current 30-yr conventional rate sitting right around 2.77% as of the time of this writing. And while home values continue to rise, these low rates remain a bargain for buyer’s today and are helping contribute to the long-lasting demand for residential home purchases.
We have included a few of the charts we follow and added some commentary to help you understand what we are seeing. At the bottom we offer an overview of where we see this market at today and a guess where we see it going as we move through the rest of 2021.
As always we appreciate you, our clients, friends, and blog followers, for your continued support and loyalty over the years. If we can do anything to assist you in any of your real estate needs, please reach out to us for help.
Number Of Homes Sold
The year 2020 ended as THE best year for home sales in recent history. Coming into this year there was reason to believe that 2021 may even top those numbers. As you can see from the chart below, while the number of homes sold has increased each month this year, we are trending below totals from last year. With that being said, the real estate market remains strong as we head into the second half of the year.
This chart shows the total number of homes sold in the Southern Indiana real estate market (Clark, Floyd, Harrison counties) per Southern Indiana Realtors Association (SIRA) MLS data over each of the last 14 months.
Homes For Sale
The number of active listings available (also known as ‘home inventory’) shows how many houses are available for buyers to purchase. In the Southern Indiana market we have experienced a steady decline in the number of active listings over the last few years. This lack of listings has led to houses selling quicker than historically normal when they do hit the market which has put upward pressure on home values. All good things for sellers, but challenging for buyers.
However, as you can see from the chart above, July 2021 snapped a streak of 13 consecutive month of falling home inventory. This will definitely be a trend we continue to follow over the next few months. While this is welcome news for buyers, it may be short-lived as historically the Southern Indiana market sees a drop off in new listings as we move into the colder months of the year. Time will tell.
Average Sales Price
This chart needs little explanation as it shows a steady increase in the average sales price we’ve seen in our area this year. This is due in large part to the factors discussed above and the continued low interest rates as we will see in the next chart. Until there is a significant change in mortgage rates or added home inventory, we anticipate a continuation of the increase in average sales price in our market across 2021.
We are back to about where we started the year in terms of mortgage rates. We saw a small rise in rates in January through March, but since then rates have been on a steady path lower. In the last couple of weeks, we have seen rates drop to 2.77% for a 30-yr conventional loan and 2.1% for a 15yr conventional. These are near the lowest we’ve seen all year. So while prices continue to rise, the lower rates have helped keep mortgage payment amounts steady.
One additional point of interest is that we have started to see more price reductions from sellers than we’ve seen in quite some time. We believe this is due to some sellers who are stretching their listing price as high as possible to see just what the maximum price is the market will bear. With this comes the need to reduce the price if buyers don’t pounce right away. This is another metric we will continue to watch with curiosity as we move forward.
S0 What Does All Of This Mean?
What does this mean for home buyers and sellers? It is our opinion that the current real estate market continues to be strong for sellers. While home inventory did pop a little in July, we still found the market quite competitive for our buyer clients and attractive for our seller clients. Historically low mortgage rates, below average inventory, and high demand kept houses selling at a fast pace once they hit the market. There remains strong buyer demand at most price points and in most areas in our market. Homes that are well priced, in good condition, and are well staged continue to be in high demand and often sell quickly with multiple offers and for more than asking price.
We do not have a crystal ball, but current data suggests that these trends are likely to continue through the next several months of 2021 and we feel like it is more likely than not that demand will remain strong the rest of the year.
The biggest threats to the current market as we see it right now are the uptick in cases of the Covid-19 Delta variant. Many local governments and businesses are starting to return to mask mandates and companies are once again feeling the stress of a possible slow down in revenue later this year if shutdowns are re-introduced.
We are also aware that local, state, and national economic conditions and/or governmental policies can change at any time and have an impact on the real estate market.
As always, we will continue to monitor the markets and educate you on what we see. For the most up to date information, please subscribe to our blog at www.812Living.com/blog and will send updates directly to your email inbox as the market changes.
If you would like more information about the value of your home, or to find out what is selling in your area, please contact us and ask about our “Neighborhood Watch” alerts.
*Please note, any forward looking information contained herein is strictly our opinion and is subject to change without notice and as such it should not be acted upon without first consulting your professional advisor(s).
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