Hancock County housing sales cool, but optimism still abounds in 2014

According to a report released Monday by F.C. Tucker Realtors, average sale prices were up on the first eight months of the year compared to last year in eight of the nine metro-Indianapolis counties the company tracks.

In Hancock County, the average price of a single-family home increased 2.8 percent over last year. The  average price went from $151,544 to $155,746, the company reported.

That rising margin, however, was still not enough to keep the market abreast of the 2013 frenzy, which was one of strongest sales years on record. Listings were off 6.9 percent, in August, which means fewer people are trying to sell their homes.

Pending sales were also down 1.9 percent from 2013 and off 4.3 percent on the year.

Those declines, however, are no reason to lose heart, local experts say.

“The last three years have all improved,” said Roy Wilson, broker/owner with Century 21 Wilson and Associates in Greenfield. “The problem we have today is just a shortage of housing.”

The Indiana Association of Realtors local market update for August shows the county’s inventory of homes for sale is down 5.5 percent – from 548 to 518 – over last year, which translates to about a 5½-month inventory.

Hamilton County led the region in housing inventory, showing a 6.9 percent jump, to 2,098 homes available, over last year.

Locally, slowing rising prices appear to be keeping sellers on the sidelines, Wilson said.

“Though they are increasing, values have not fully recovered, and people are not willing to take the hit,” Wilson said.

“Statistically, I think we’re up a little, but we still need to get back the values to make a home the significant investment that it is,” he said.

In addition to home prices, the shortage itself may be keeping some potential sellers on the sidelines.

“It’s kind of a double-edged sword,” said Melissa Ewald of Borgmann Realty in Greenfield.

Those with a house to sell might be hesitant to list their property without first knowing they have identified another home to buy.

“If their house gets sold,” Ewald said, “they may have nowhere to go.”

Though modest, the increasing home values are allowing many homeowners who were once under water on their mortgages to recover somewhat, experts say.

Further Wilson notes that the glut of repossessed homes unloaded into the market by foreclosing banks has now begun to ease as well, which has allowed prices to ease upward.

“The repos are becoming less significant,” he said. “They are easing considerably.”

Though Hancock County does not maintain the number of foreclosure actions filed, and the Division of State Court Administration is currently working on figures for its 2013 report, RealtyTrac, an online database of foreclosed properties, indicated in its latest U.S. Foreclosure Market Report for 2014 that almost 117,000 U.S. foreclosure filings were reported for August. That number is up 7 percent from July but 9 percent below 2013.

Additionally, comparing 2014 statistics with those of a year ago does not necessarily provide an accurate snapshot of the current market in the long view, as 2013 was somewhat of an anomaly.

“When I look back, 2013 was one of the best years in central Indiana real estate,” said Jim Litten, president of F.C. Tucker Co. “We had low interest rates and pent-up demand, and when the market corrected, everyone on the sidelines jumped back in. It was like a feeding frenzy last year.”

That frenzy was the fourth-best finish in the area’s history. It was perhaps inevitable that the market would cool somewhat, Litten said.

“It will be interesting 100 days from now to look back and see where we are. Last year slowed pretty good during the last quarter, and I think this year the last quarter will be a little more stable and a little less volatile,” he said.

Market watchers like Litten are calling this year’s numbers “the new normal,” for the single-family sector, and as long as interest rates stay in check, residential real estate should remain healthy.

According to Zillow.com Friday afternoon, the Indiana market average for a 30-year fixed mortgage was 4.18 percent, running just above the national market average of 4.17 percent.

Financing remains “excellent” for qualified buyers, and demand is good for homes priced $250,000 and below, Wilson said.

Sellers continue to receive a strong return on list price, pocketing almost 94 percent of the listing prices so far this year, almost a 2 percent jump over this time last year, according to Association of Realtors August figures.

“It’s a good time to be in the market,” Ewald said.

A good time, that is, as long as interest rates remain low. That seems likely, given the Federal Reserve’s decision this week to leave rates low for now. That heartens those who market and sell homes.

“If interest rates rise, that could knock the legs right off the recovery,” Wilson said.