Home prices in the Gary metropolitan area that encompasses most of Northwest Indiana shot up by 13.8% year-over-year last year, according to recently released federal data.
The Federal Housing Finance Agency House Price Index found Northwest Indiana ranked 38th in home price appreciation out of 100 metro areas nationwide.
Home prices in the Calumet Region have risen by more than 40% as compared to 2007, according to the FHFA.
"It's an extremely hot and competitive market with limited inventory," Greater Northwest Indiana Association of Realtors CEO Peter Novak said. "That's a national issue but more so in Northwest Indiana because of the crossover from Illinois buyers who are increasingly seeing Northwest Indiana as a desirable place to live. There's high demand. Anything that's listed sells quickly, often for above the asking prices. Properties have multiple offers. Buyers and competing and fighting."
The Gary metro ranked just behind Indianapolis, which ranked 37th nationally with 14.6% year-over-year growth last year.
Home price appreciation in Northwest Indiana exceeded that in the broader Chicago metro of which the Region is a part. The Chicago-Evanston-Naperville metro placed 90th nationwide with 9.6% growth in home prices last year.
"Every community is a bit different but almost every town is experiencing accelerated growth," said Michael Conner, a realtor with @properties in Michigan City, where a home off the lakefront recently sold for a record $850,000 or $100,000 more than the asking price. "The reasons for this are varied. Some of the demand is driven by COVID in the second home market and some are a result of people looking for a better quality of life and looking for value and tired of the dysfunctional nature of Cook County, Illinois."
Michigan City and lakefront towns in LaPorte County just had a record $130 million in sales, with a 40% jump to $90 million in sales along the Lake Michigan shoreline.
Nationally, Boise, Idaho; Austin, Texas; Tacoma, Washington; Salt Lake City, Utah; Phoenix, Arizona; El Paso, Texas; Stockton, California; Knoxville, Tennessee; Grand Rapids, Michigan, and Bridgeport, Connecticut were the fastest-growing in home values nationwide, according to the Federal Housing Finance Authority. Home prices in Boise rose a staggering 28.2% year-over-year in 2020.
In the first quarter, home prices rose 3.6% in Northwest Indiana and 12.6% nationwide, according to the Federal Housing Finance Agency.
Homes sales in the Region exceeded the previous peak in 2007 despite far fewer homes being for sale, Novak said. About 6,000 homes were on the market the last time more than 11,000 homes sold in a year in Northwest Indiana.
But more than 11,000 homes sold last year despite only about 1,000 homes being on the market at any given time.
"To sell the same number of homes with way less inventory shows how strong demand is," he said. "Home construction can't keep up. They can't build single-family homes fast enough."
Homes are in scarce supply in the Region because fewer people are selling.
"Normally a seller is also a buyer," Novak said. "So people aren't cashing in on the increased value of their homes, typically their most valuable asset, because there's limited inventory and they'd have to pay a lot more."
Demand has been fueled by historically low interest rates, ongoing migration from Illinois and people looking for more space while they work from home during the coronavirus pandemic.
"Like a lot of people I thought the pandemic would cause the housing market to cool off," Novak said. "But the opposite happened. Residential home sales were one of the leading sectors of the economy during the pandemic."
The Greater Northwest Indiana Association of Realtors reports that the median sales price in Lake, Porter, LaPorte, Jasper Newton, Porter, Pulaski and Starke counties rose to $193,000 last year. Closed sales grew 10% to 11,672 in 2020.
The median sales price of a home in Northwest Indiana has soared from just over $120,000 back in 2020 to more than $190,000, according to GNIAR. In December, the average sales price of a home rose 16.6% across Northwest Indiana from $201,266 to $234,749.
Chuck Vander Stelt with Quadwalls.com, a Valparaiso-based real estate website, estimates homes in Northwest Indiana are selling for 20% more than during May of last year.
"This is some unbelievable appreciation," Vander Stelt wrote in Quadwalls.com's June market report. "Across the board, all home types had major home price increases."
It remains a sellers' market.
More than 840 homes were sold in Northwest Indiana in May at an average sales price of $252,131, or 20% more than a year ago. Median sales prices rose 16% to $220,000 in May, while the volume of single-family home sales increased by 21% last month.
"Homebuyers’ buying of homes continues to outpace sellers’ willingness to sell their homes. Nine hundred seventy-six home sales were reported in the GNIAR MLS for May 2021. This is a 21% increase compared to May 2020," Vander Stelt wrote. "Additionally, as of this writing, there were 830 available homes for sale in Northwest Indiana. With less than 30 days of home inventory, we still do not have enough homes to meet buyers’ demands."