July may have been cooler than usual temperature-wise, but the Northwest Indiana market stayed hot with an increase in sales and pricing, according to Jeanne Sommer, broker/owner of CENTURY 21 Alliance Group in Valparaiso.
The Valparaiso-based real estate agency has seen a significant increase in activity this year, with more showings and sales.
“Our office had the highest number of showings and monthly sales for July in the past six years,” Sommer said.
The latest reports from the Greater Northwest Indiana Association of REALTORS® show both Lake and Porter County had increased home sales, decreased days on the market and a higher average price in the past seven months when compared to the same time period in 2012.
In fact, Lake and Porter Counties saw a continued increase in residential sales, up 26% for Lake and 24% for Porter over last year.
The number of single-family existing home sales was up from 2,424 in Lake County in 2012 to 3,045 in 2013 and from 988 in Porter County to 1,228. Meanwhile, the average sales price on single-family homes rose from $133,588 to $135,267 in Lake County and from $182,158 to $187,042 in Porter County.
In addition, the number of days a property was listed on the market was down from 140 last year in Lake County to 121 this year, while Porter County saw a decrease from 147 to 133.
Of special note to sellers, the sale to listing price percentage remains above 95 percent, which is indicative of the fact that homes priced right for the market right now are selling.
Together, these numbers certainly demonstrate the strong demand among homebuyers right now – along with the traditional rush to buy before school starts, rising interest rates and the expectation of higher rates in the future have influenced many would-be buyers who have been sitting on the fence with a wait-and-see attitude to make their move.
Along with pent up demand, many experts believe easier access to loans, stronger consumer confidence and expectations for higher home prices will continue to bolster the housing market.
However, Lawrence Yun, chief economist for the National Association of REALTORS® (NAR), expects mortgage rates to rise to 5 percent by the end of the year, reducing affordability as well as the pool of potential home buyers.
Since early May, the average rate for the 30-year fixed-rate mortgage has increased more than one percentage point to hit 4.40 percent this month, according to weekly data from federally controlled mortgage buyer Freddie Mac.
So far, rising rates have spurred sales. Like GNIAR, NAR reported that existing-home sales in July rose 6.5 percent to a seasonally adjusted annual rate of 5.39 million. That level was the highest since late 2009, when buyers rushed to meet a tax-credit deadline.
Also of note from NAR, inventories rose 5.6% to 2.28 million homes available for sale in July, representing a 5.1-month supply at current sales rates. Despite that increase, supply remains below the year-earlier level of 6.3 months.
While economists project that rising prices could bolster inventories as more sellers are willing and able to list their homes for sale, the market also needs home builders to ramp up production and expand inventories, but they face a variety of headwinds, according to Yun.
It’s possible that higher rates and rising prices, along with the builder headwinds of skilled-labor shortages and a shortage of buildable land, could potentially slow the housing recovery at some point.
But for now, the latest numbers demonstrate the strength of the housing market which has been shown to bolster the slow-growing US economy by generating confidence among consumers, boosting household spending and creating construction jobs.
Pillars of the Community: Like our local Realtors, northwest Indiana builders have been hard at work meeting buyer demand all summer long. Watch for details on the upcoming Fall Showcase of Homes where you can tour the area’s newest homes at your leisure Friday through Sunday, September 27-29 from noon to 4pm each day.
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