Stimulus tax credits came to the rescue of the local housing market last year, but they weren't enough to prevent a third straight yearly decline in existing home sales, according to figures from the Greater Northwest Indiana Association of Realtors.
Altogether, member Realtors sold 7,124 single-family homes last year, an 8.2 percent decline from the 7,762 sales in 2008, according to association figures. It was the fewest homes sold in the five counties covered by the association in more than a decade.
"Interest rates for homebuyers remained very low, but the tough part for home sales was people not having jobs," said Pete Novak, CEO of the Greater Northwest Indiana Association of Realtors.
The year got off to a dismal start in January and February, but things steadily improved as word spread about the federal credit Congress created for first-time homebuyers, Novak said. June was the first month that saw a year-over-year rise in home sales, with a 1.4 percent increase.
In October, homes sales rose a surprising 11.6 percent. November proved to be the strongest month for home sales with sales up 48 percent. December sales improved by 2.9 percent as compared to the same month of 2008.
"Both October and November were the big months for 2009, and that was attributable to the tax credit, which sparked buyers to get off the fence," Novak said.
The Greater Northwest Indiana Association of Realtors represents Realtors in Lake, Porter, LaPorte, Newton and Jasper counties.
The National Association of Realtors has not yet released its year-end home sales numbers for the nation, but in November it forecast total sales of about 5.01 million for last year, a gain of 2 percent over 2008. The association is predicting a 13.6 percent gain for this year.
In Northwest Indiana, existing-home sales peaked in 2006 with a total of 11,349 homes sold, according to the Greater Northwest Indiana Association of Realtors.
For those who were capable of buying a home, low interest rates, depressed prices and the tax credits of up to $8,000 offered remarkable opportunities, according to Minakshi Ghuman, a Realtor with 21st Century Pace Estates, in Valparaiso.
The average interest rate on a 30-year fixed mortgage was 5.04 percent in 2009, with the monthly average rate dropping as low as 4.81 percent in April.
It was the tax credits that got people interested in home buying and then the low interest rates and prices enticed them to make the actual purchase, Ghuman said.
The tax credits can result in an Internal Revenue Service cash refund of up to $8,000 for a first-time homebuyer and $6,500 for a current homeowner who buys a new home.
The median home selling price dropped 4.6 percent in 2009, following a 4 percent decline the year before, according to association. The median selling price of a home in Northwest Indiana was $124,000 last year, down from $130,000 the year before.
That drop was attributable to a number of factors, including a glut of foreclosed properties on the market, a large supply of unsold homes and the tax credit representing a bigger advantage for buyers in lower price ranges, according to local Realtors.
The drop in sales and prices was fairly uniform across the region, although the dip in median selling prices in Porter County was relatively small at just 1.5 percent, association figures show. In Lake County, the drop in median selling price was 5.6 percent.
Existing single-family home sales in Lake and Porter counties in 2009
Lake County
2009 homes sold: 4,263
2008 homes sold: 4,648
2009 median sold price: $117,000
2008 median sold price: $124,000
Porter County
2009 homes sold: 1,469
2008 homes sold: 1,630
2009 median sold price: $161,000
2008 median sold price: $163,400
Source: Greater Northwest Indiana Association of Realtors
