Indianapolis Real Estate Matters

With the extension of the home buyer tax credit through April 30^th of this year, the first four months of the year were outstanding! (Sales were up 25% to 50% in each of the first four months.) Historically, about 35% of the sales in the market are first time home buyers - with the stimulus package it jumped into the mid 40% range. I can remember many of you saying to me during March and April that you were as busy as you’ve ever been. We projected that when the stimulus package expired April 30^th that sales would drop off approximately 10% the month of May - we missed the boat on that projection! Sales in May, for the real estate board, were off over 30% and that trend continued into June with sales being off approximately 30%.

In further analysis of why sales were off, the number of sales that were compressed into the first four months of the year, with the stimulus package, caused May and June to be softer. We are hoping that the second six months of the year will be similar to the second six months of last year. If all of you remember, the market started picking up this time last year and allowed us to have a good year. Currently our unit sales are up approximately 25% over the same period last year; again, all due to the robust market in the first four months. The other thing is, we have seen the average sale price start to increase. I’m not sure that the average home is going up in value, but I think that there are fewer lower price range homes being sold.

What’s on the horizon? With interest rates at historical lows I think our market is going to be okay. Hardly a day goes by that we don’t read about an employer moving to Indiana and hiring more people. Part of the dilemma, that caused the economic slow down in the last four years, was caused by the consumers not spending money and buying durable goods. With durable goods not being produced, employers laid off employees and therefore increased the unemployment rate. As we move forward, I think we are seeing consumer confidence come back and employers hiring people again. If our unemployment numbers go down, I think that you will see our market correspondingly increase.

With all of that said, the most important thing is for all of us to keep focused. As we enter these last six months of the year, continue to do the things that we’ve done for the last four years. (Staying in touch with our clients, holding a lot of open houses and providing the superior service that each of you are known for.)

As always, if you should have any questions about any of the statistics in the market, please don’t hesitate to call me or your managers. We are more than willing to help. Here’s wishing you a great finish to 2010.