“Sellers are getting a ton of offers.”
That’s just one reason Peter Novak, chief executive at Greater Northwest Indiana Association of Realtors in Merrillville, says it's a seller’s market in home real estate.
“Demand is high and sellers are low,” so buyers don’t have a lot to choose from, leading to higher home prices locally—and the seller benefits from that, says Novak.
In the first quarter of 2017 homes sold for an average of $44,000 more than their purchase price, according to Attorn Data Solutions numbers reported April 27 at money.cnn.com, making it “the most profitable time to sell a home in 10 years.”
With the economic rebound from the Great Recession getting somewhat stronger, there are more buyers, says Novak. But that hasn't hastened purchases, because Novak says they’re having to hunt harder with fewer homes hitting the market.
“It’s kind of an odd thing: Home prices have gone up, so normally sellers would look to capitalize on that,” says Novak. But he says more factors weigh into the decision to sell than just reaping the equity in a home. Job transfers, health reasons, growing families needing more room, empty-nesters needing less are among the major drivers of a decision to sell.
Sellers also become buyers in the process, and they need somewhere to go, Novak says. “If they’re not finding what they like, that becomes a problem putting their home up for sale. They pull back a little bit,” he says.
Novak also points out that the pace of new home construction is lagging the economic recovery. “Locally we’re starting to see a lot more building activity in the last two years, but when people are upgrading they’ll look to new construction and so sometimes they’re not selling (if enough new construction isn’t there).”
How long can sellers expect to dominate? Though Novak says that’s not easy to predict. “The last four years we’ve seen some pretty astronomical growth in prices and numbers of homes sold, but now it’s slacking a bit because prices are getting so high that buyers can begin to push back; everyone has a limit.”
Still, he says, the most recent numbers released in June showed prices rose again.
In the money.cnn.com report, Daren Bloomquist, senior vice president at Attorn, says he’s guessing “It will get even better before it gets worse.”
“No one really knows” how long that will last, says Novak. “But our members feel the economy will stay pretty good over 2017.”