Goshen News, Goshen, IN

Business

February 3, 2013

Local home sales increasing

GOSHEN — Realtors live day-to-day with consumer sentiment and these days potential home buyers are feeling pretty good.

According to the Indiana Association of Realtors, home sales in 2012 took a big jump over 2011. All the data Realtors watch were up in 2012. Examples are:

• There were 8,531 more homes sold statewide in 2012 than 2011.

• The median price of homes rose to $118,000, which was a 4.5 percent gain over 2011’s $112,900 median price and even higher than 2010’s $112,000.

• The average price of homes sold in 2012 was $140,043, a 3.6 percent gain.

• Inventory of homes for sale dropped 7.6 percent to 44,943 per month average in 2012.

Home sales in Elkhart County mimicked the success Realtors experienced statewide in 2012.

“Interest rates have really lowered. I think that is a big cause for it,” said April Wyngarden, a Bristol Realtor who used to work for an agency but has now struck out on her own. “I think that is a big cause for it (the surge in sales). People are seeing they can get a home for a good price.”

That price is actually going up a bit in Elkhart County According to the IAR. The median price for a home sold in the county in 2012 was $100,000. That number is a 5.3 percent increase over the $95,000 median price realized for local homes in 2011.

While sellers are glad to see they have a chance to gain more from their home, buyers too are getting a good deal, according to local Realtors.

“Their payments are going to be lower due to interest rates,” according to Wyngarden.

And those rates on mortgages are still very low, according to one mortgage professional.

One of the things Staci Goss does each day from her office at Interra Credit Union is to check what that day’s interests rates are. Recently the rate for a 30-year fixed rate loan was 3.5 percent.

“Rates right now are obviously really low, so it’s a great time to buy,” Goss said.

Early last week she said mortgage rates in the secondary market used by the credit union were “in the 3s” for 10-, 15- and 30-year mortgages.

Because of the low mortgage rates and the upward movement in local home sales, Goss said the credit union’s staff is expecting changes.

“We think this is going to be more of a purchasing market this year than a refinancing market,” she said. “We are really going to hit the purchase market this year.”

To attract more mortgage customers, Goss said the credit union will create a first-time home buyer program this year.

Don DeShano, broker for Cressy Everett Real Estate in Elkhart County, said the increase in sales in 2012 seems to be carrying over into the new year.

“A couple of things we are seeing — the activity is much improved over a year ago. The activity we measure are things like showings, how many people are out looking, open houses on Sundays and active listings in the market in the county,” DeShano said. “Showings are up noticeably. Open house traffic is very robust here the first two weeks in January. And, inventory is down.”

The prevalence of foreclosed homes and homes sold in short-sales, where the owner owes more than they receive in a sale, is easing, DeShano said. In Elkhart County in 2012 about 43 percent of the homes sold were those types of homes, which Realtors lump together under the “distressed” label. As a comparison, DeShano said, at the height of the housing boom, that number was just 3 percent in 2002. The drop in distressed sales was 27 percent in 2012, according to DeShano.

“We expect this year it is going to be even less,” he said.

Flipping is back

Flipping of homes became so popular during the housing boom that the trend spawned reality TV shows featuring people who buy dilapidated homes, refurbish them and sell them for profit.  Both DeShano and Goss said they are seeing an increase in that activity.

“We have a lot of people who are doing that now...,” Goss said. “They use their home equity line of credit to purchase the home and improve it and sell them.”

“I think it is a factor (in sales), DeShano said.

He indicated the market for flipped houses is a lot more iffy these days, but at the height of the housing boom, “Even if you did not make a good buy it would appreciate 7 or 8 percent over that time (three months) anyway,” he said.

Numbers are good

As president of the Multiple Listing Service in Elkhart County Gary Decker pores over local housing statistics. He believes the numbers lined up well to spur last year’s resurgence.

“I think economically, Decker said, “needless to say, we are in better position this time than we were a year ago. There are more people working. That’s a fact.”

The county’s unemployment rate dipped into the high-8 percent range for much of 2012, but popped backup to 9.3 percent in December. That’s still far below the 18.3 rate that led the nation in January 2009.

Decker said people are feeling better about their jobs and their futures these days, and that confidence is helping build home sales. Also, he cited the 3.5 percent interest rate, which he said buyers should get in on now because forecasts are that the rate will rise higher.

“Now is the time to buy because there is some concern about the long-term interest rate and were it will be at. We have some economists who believe mortgage rates will be 4.5 percent by the end of the year,” Decker said.

He sees all kinds of improvements in local home sales. One example he gave was that in 2010 the average time a local house was on the market was 190 days. That stat is now down to 168 days, Decker said.

“If you look at the graphs, just about everything is improved,” he said.

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