SOUTHERN INDIANA — The state’s housing market has cooled down following the sizzling pace of 2021.
Sales of existing homes in Indiana for August grew by 4% compared to July, but they decreased by 8% when compared to August of 2021.
Indiana year-to-date sales are over 61,000, which is down about 4.5% compared to 2021. Sales are still ahead of 2018-2020, according to the Indiana Association of Realtors.
Homes newly listed on the market dropped sharply last month. They went down 9% from July and 13% when compared to August 2021.
“What we’re seeing here is, if homes are not at market value they are not selling within 24-48 hours,” said Paul Kiger, Real Estate Broker for RE/Max Advantage in Southern Indiana. “Buyers are exhausted from the last 12 months and do not want to pay full price and sellers are expected to compromise during the inspection.”
The inspection is when a buyer has someone inspect the house before a final sale is made. This gives the buyer an opportunity for negotiation before buying the home.
Median prices of houses decreased in Indiana from $250,000 in June to $240,000 at the end of August. Despite this, the median price is nearly 10% above August 2021.
“Inflation and mortgage rate pressures hit housing demand first and now we’re seeing the full impact on supply,” said Mark Fisher, CEO of the Indiana Association of Realtors. “Even with prices up 10% from last year, sellers aren’t as eager to join a market with less intense competition among buyers.”
The trend is similar in Southern Indiana, though that could help potential homebuyers.
“The urgency in the demand is not as high as it was a year ago, so going into the fall market it will be easier to find a home,” Kiger said.
Typically, a home was on the market for 42 days from listing to closing this year. In August, it matched the average sales cycle of 2021 making it 44 days.
Regionally, southeast Indiana has stayed even with its sales from 2021 on a year-to-date basis.
“I think our market is stabilizing. It is becoming more fair for both sides of the transaction, the teeter totter has leveled,” Kiger said. “I think we will just continue to stabilize and the market will continue to get healthier and by that I mean an even playing field for seller and buyer.”
The downward trend had the most impact on houses with a listing price of $200,000 or less. In August, there was 27.5% drop in homes listed at that level when compared to 2021.
Recent studies have also shown that rent has been increasing. Vacancy rates are lower and that has caused the price of apartments and residential rental properties to rise.
According to a report released Monday by the Fair Housing Center of Central Indiana, renters in Marion County have paid on average $200 to $300 more per month since the pandemic started.