What's Happening In The Southern Indiana Real Estate Market?
Updated: May 3, 2021
CURRENT MARKET TRENDS
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 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.
Coming out of the pandemic year of 2020, the Southern Indiana real estate market has started off with a bang in the first half of the year. As the world continues to “reopen”, the demand for housing remains high and growing with seemingly no end in sight. This demand combined with the ongoing lack of housing inventory continues to push home prices higher in our market.
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 moved upwards slightly off their historic all time lows of late 2020. Still, these low rates remain a bargain for buyer’s today and are helping contribute to the overall 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 homes sales in recent history. And while March 2021 was lower compared to the same month in 2020, we believe may rival last year in terms of total home sales when all is said and done. 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. (Southern Indiana Realtors Association). As is typical in our market you can see the seasonal lows in home sales that accompany the cold winter months, but it doesn’t take long for buyers and sellers to get back in action once the ground thaws.
March, is typically the month when buyer demand starts ramping heading toward the summer sales peak. However over the last few years we’ve seen a rush in March only to be followed by a small pull back in April. Then the pullback reverses quickly as we see month by month increases in home sales from March through August when we reach the peak of the selling season. We are anticipating the same pattern will likely play out across 2021.
Homes For Sale
The number of active listings available (also known as inventory) is a chart that 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.
As you can see from the chart above, we are at an all time low when it comes to the number of houses for sale. In fact as of 5/03/2021, there were only 285 homes for sale in all of the SIRA MLS. For buyers, this creates a situation where houses sell very quickly and multiple offers are the norm. To compete in this market, buyers must have their financing ready, a well defined strategy for making an offer, and an experienced real estate agent can help tip the odds in their favor.
Average Sales Price
This chart needs little explanation as it shows a steady increase in the average sales price in our area over the last five years. 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 mortgage rates or added home inventory, we anticipate a continuation of the increase in average sales price in our market across 2021.
In February 2021 we started seeing a slow rise in the rates for 30-yr and 15-year mortgages, the most common loan terms for U.S. homebuyers. Those rates dipped in March, but in the last couple of weeks, we have seen a small move upward again. Even with the small rise, most buyers are finding their rate coming in at or slightly below 3% which is still a great rate by historical standards.
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 sales took a small breather in April, low inventory and high demand kept houses selling at a super fast pace once they hit the market. There is strong buyer demand at most price points and in most areas in our market which has led to an all-time low in housing inventory. Homes that are well priced, in good condition, and are well staged continue to be in high demand and often sell quickly. We continue to see home sellers receive multiple offers on their properties with many homes going for above list price.
We do not have a crystal ball, but current data suggests that these trends are likely to continue through at least the remainder of the second quarter of 2021 and we feel like it is more likely than not that demand will remain strong the rest of the year.
Regarding interest rates, most economists we follow suggest that rates will float up and down, but will likely remain low. Our Southern Indiana Mortgage expert, Brad Sea with Kentuckiana Mortgage Group concurs, "I believe mortgage rates should stay below 4% all year barring some major negative economic event, like runaway inflation or other game-changing market related issue." These low rates will continue to encourage buyers to keep buying.
Finally we continue to see economic and financial stimulus coming from the White House with more proposed stimulus on the table for later this year. This money will make its way into and through an already ‘hot’ economy and will likely continue to give people the confidence and dollars they need to keep buying.
Having said all of that, we are 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.
For the most up to date information, please subscribe to our blog at www.812Living.com/blog and will send updates to your email inbox as the market changes. And, if you'd like a free copy of our Spring Buyers or Sellers Guide click here:
*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).