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February continues 2016's strong start to home sales

Sales of existing homes — and their prices — are on the rise in 2016 as compared to the start of 2015. Revived demand and tight inventory help encourage new home construction. Pictured above is Coolman Communities' ongoing project in the Bridgewater development in Valparaiso.

Sales of existing homes in Northwest Indiana continued strong year-over-year growth in February, jumping 17.1 percent in the seven county area that makes up the Greater Northwest Indiana Association of Realtors.

A total of 583 single-family homes, condominiums and townhomes were sold in February in Lake, Porter, LaPorte, Jasper, Newton, Starke and Pulaski counties.

GNIAR CEO Peter Novak called the results "phenomenal," noting they were essentially a repeat of January's year-over-year numbers.

"They were both really good months," he said.

February's median sale prices were also up, showing an 8.8 percent year-over-year gain to $136,000.

Novak said the increased price isn't a surprise, because inventory remains tight. Local realtors are reporting increased competition among buyers, with multiple offers being made on many homes.

In the long term, sales and prices won't continue to rise in tandem. "We would always rather see a balanced market," Novak said, noting that plans for new home construction would help relieve the inventory issue.

Nationally, home sales were up 2.2 percent over a year ago, but down 7.1 percent from January, according to the National Association of Realtors.

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The NAR's chief economist, Lawrence Yun, called that month-to-month decline disappointing.

"Sales took a considerable step back in most of the country last month, and especially in the Northeast and Midwest," Yun said. "The lull in contract signings in January from the large East Coast blizzard, along with the slump in the stock market, may have played a role in February's lack of closings."

But Yun said supply and affordability are the main challenges.

"Finding the right property at an affordable price is burdening many potential buyers," Yun said.

Demand is strong, according to Yun, but wages aren't keeping up with prices, and some potential buyers are concerned about the state of the economy.

In Northwest Indiana, sales were near even on a month-to-month basis, and the year-to-date numbers show a 16.7 percent jump in sales and 9.5 percent increase in median selling price over the first two months of 2015. The 1,180 sales this year have had a median price of $138,000.

Lake County has seen a 16 percent increase in sales and 8.9 percent jump in median price — from 612 sales to 710, and $122,500 to $133,375. Porter County's year-to-date increases are 20.7 percent in sales, from 198 to 239, and 0.7 percent in median price, from $168,750 to $170,000.

Sales are boosted by mortgage rates, which remain low. According to mortgage bundler Freddie Mac, the average rate on a conventional 30-year fixed-rate mortgage was 3.66 percent in February, down from 3.87 percent in March.

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Assistant Deputy Editor

Andrew covers transportation, real estate, casinos and other topics for The Times business section. A Crown Point native, he joined The Times in 2014, and has more than 15 years experience as a reporter and editor at Region newspapers.