9/3/2005 11:04:00 AM Hancock County housing market stable, experts say
Daily Reporter
Eric North/Daily Reporter
Predictions of a looming collapse of the robust national housing market may be less of a threat in a central Indiana, according to local experts.
“We have been lucky because we are seeing steady growth in home values,” said Jim Litten, an agent for the F.C. Tucker agency. “We haven’t seen the kinds of value explosions that they have experienced on both coasts.”
Housing has been booming nationwide for the past several years as low interest rates have spawned a buying boom. Some markets have seen huge price increases due to that boom.
In recent weeks, observers have expressed concern that the boom would turn to a bust due to fears of an economic downturn or a hike in interest rates.
But local experts say the Hancock County market should remain stable with sustainable appreciation well into the future.
“There were some tremendous home price swings on both coasts – in Las Vegas some values went up 30-35 percent in one year. We haven’t seen those types of increases; ours are more like 1-3 percent,” Litten said.
Most local real estate agents say a more conservative climate exists in the area which will keep the climb on course.
“We just don’t see people making hasty decisions in this market,” said Kathy Hall of Century 21 Realty Group – Elsbury. “They don’t react or sell just because the value goes up a little.”
According to figures released by the Metropolitan Indianapolis Board of Realtors, the number of homes sold by its member agents during the first six months of 2005 was up 6 percent vs. the same period in 2004. Most experts believe that’s a sustainable figure in home sales.
A report from Builders Association of Greater Indianapolis, however, indicates the number of permits for new homes in Hancock County was down slightly when comparing the same two six-month periods.
Those who watch the market point out, however, that the dip in permits could be a shift, rather than a sign of a downturn.
“We are not as busy issuing permits as we were last year,” said Mike Dale, executive director of the Hancock County Area Plan Commission. “We are certainly not as busy as in 2002.”
The Builders Association report indicates that 250 permits were issued for new homes in Hancock County during the first six months of this year. Dale said that total was closer to 300 during the same period in 2004 and 600 during the record year of 2002.
Greenfield officials said while the city is not close to setting a new record, nearly 300 permits could be issued for new homes before the end of the year.
“I think the kind of housing being built is different than in 2002,” said Dale. “There were a lot of first-time homes or starter homes being built in the county at that time which have a lower price, but now the second homes with moderate prices are being built and that is increasing the value and decreasing the number.”
The average selling price for a home in Hancock County increased $12,000 from July of 2004 to July, 2005 according to the Board of Realtor’s report. Experts say that means while some older homes may be selling for $60,000-$80,000, many new homes are selling near $200,000.
“There are a number of good subdivisions coming on line that can accommodate the middle-priced home market,” said Dale Langhans, president of the Hancock County Builder’s Association.
Langhans, who operates a custom home building company with her husband, said the market in Hancock County was still very good for those looking at or building middle and higher end homes. Approval of a few new subdivisions during 2005 should keep activity strong for builders well into the future.
“One of the challenges in the Indianapolis area is that we have a lot of land and no natural boundaries so we have a lot of new construction,” said Litten.
Litten pores over sales and construction numbers each month for the Realtor board. He believes the pace of new construction puts a lot of pressure on agents to sell existing homes to keep prices up.
“When buyers are looking, they see the new construction and it is hard to get some of them to look at existing because the carpets are a little worn and the walls not as shiny,” Litten said. “It allows the price of existing homes to fall.”
All of the experts agreed that as long as interest rates remain low, the market will continue to build and houses will sell.
“We have been seeing rates at the 5.87-6.25 percentage ranges on the 30-year product,” said Hall. “That is a good rate to keep sales going along.”
