Central Indiana’s housing market continues to defy the pandemic’s recession as trends seen earlier in the year persist well into the fall.
The latest analysis from MIBOR, the professional organization representing Central Indiana Realtors, notes that a low housing stock and a pool of competitive buyers once again drove home prices upward.
MIBOR pegs the October median sales price of homes at $221,000 — slightly down from September but nearly 15% above one year ago. Meanwhile, the organization’s analysis of data for 16 Central Indiana counties reflects that the active inventory of available for-sale homes was 49% lower compared to one year ago. Inventory was slightly higher than September.
Both closed and pending sales were up year over year. October was the fifth month in a row where price appreciation exceeded 10%, CEO Shelley Specchio said in a statement. MIBOR isn’t expecting the market activity to slow, prompting the organization’s report to warn about growing affordability concerns.
“While there are no signs that we are in a real estate ‘bubble’, this level of price appreciation is somewhat concerning because we are starting to run into affordability problems,” economist Elliot Eisenberg said in the report. “Low mortgage interest rates continue to support housing, but as prices rise and down payments increase, people are starting to be priced out of the market.”
MIBOR said sellers were getting about 98% of their asking price. The average number of days a home sat on the market was 25.
Real estate company F.C. Tucker’s latest monthly stats also note the housing shortage. The company, whose analysis also covers 16 counties, offers slightly varying data from MIBOR, noting an approximately 47% decrease in housing inventory in October and a nearly 18% surge in housing prices.
The company’s analysis found that the average sale price of a home in the 16-county Central Indiana region was $261,530 last month.
“As long as available housing inventory continues its downward trajectory, home prices will keep increasing in this extremely competitive market,” Jim Litten, CEO of F.C. Tucker Company, said in a statement.
Meanwhile, new listings of for-sale homes were slightly higher in October, compared to the same month last year. However, the new listings were down 10% since September and about 5% since the start of the year.
And while Specchio adds that the desire for more functional space during the novel coronavirus pandemic appears to be driving home sales, there is some concern that Central Indiana’s increasing COVID-19 case rate could impact home sales over the next few months.
Early in the pandemic, the real estate industry adopted practices to adhere to social distancing guidelines aimed at slowing the virus’ spread. Home tours became virtual on Zoom and iPads. COVID-19 release forms became an added step to the homebuying process for some buyers.
Some anxious home sellers pulled their listings at the onset of the pandemic out of fears of coronavirus transmission, leading to a slight slow down in sales activity.