Indianapolis Real Estate Matters

2009 14 percent decrease in homes for sale is good news for homeowners

Buyers and sellers both encouraged by recent changes

INDIANAPOLIS – Available homes for sale in the nine-county region dropped 14.5 percent in January 2009 with 2,613 fewer homes on the market than in January 2008. Total homes available for sale in January were 15,415, according to active listing statistics compiled by F.C. Tucker Company. Hendricks County, Shelby County and Marion County experienced the greatest decrease in inventory, with -22 percent, -20.5 percent and -19.7 percent, respectively. With fewer homes on the market, sellers are in a better position to transition to another home.

First-time homebuyers also received good news this week with President Obama’s signing of the American Recovery and Reinvestment Act which includes a revised first-time homebuyer’s credit effective for home purchases from Jan. 1, 2009 to Dec. 1, 2009. Differences from the 2008 first-time homebuyer’s credit include no repayment and credit recapture on the sale within three years of purchase.

While the average number of pended homes sales in Central Indiana was down 19.2 percent overall in January 2009 compared to the same time last year, one Indianapolis-area county reported higher sales. Morgan County showed improvement over other counties in the nine-county region F.C. Tucker surveys, reporting a 9.1 percent increase in home sales.

This past January, 1,562 homes sold (pended) in Central Indiana. One year ago in January 2008, Central Indiana consumers purchased 1,934 homes. Litten said, “There’s still a great deal of buying activity, but it is still not at the levels we have come to expect.”

“As we move into the busy home-buying and selling season of spring, I expect more first-time home buyers will enter the market to take advantage of the new $8,000 tax credit,” said H. James Litten, president of F.C. Tucker Company’s Residential Real Estate Services Division. “I’m also hopeful that Central Indiana’s competitive home prices, coupled with efforts by the Federal government to stimulate the economy, will boost consumer confidence and motivate consumers to get off the sidelines.”

Tucker’s just-released data also shows that two Indianapolis areas saw increases in average home prices. Homes in Johnson County sold for an average of $154,239 in January 2009, compared to $136,042 in January 2008, a 13.4 percent increase in the average home sales price. Also, Boone County showed a 3.1 percent increase in home sales price, bringing the average home price to $291,058.

As the tax season nears, Litten reminds buyers that there are additional advantages to purchasing a home. “Beyond the mortgage interest and real estate tax exemptions on your tax returns, homeowners may also qualify for residential energy credits of up to 30 percent of the cost for certain home improvements, including equipment and installation for solar electric power, solar water heating, wind energy and more,” said Litten. F.C. Tucker offers a guide for first-time homebuyers at www.fctucker.com/firstbuy/home/index.html.

Active Listings - Inventory

Pended single-family and condominium home sales

Average Sale Price

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Editor’s Note: All statistics were compiled by F.C. Tucker Company from a report drawn from Propertylinx statistics on February 7, 2009. Pending means the sales contract has been signed, but the transaction has not closed. According to the NAR, pending sales typically are finalized within a month or two of signing.

With more than $2 billion in annual sales, F.C. Tucker Company is Indiana’s largest independently owned comprehensive real estate firm with 46 offices and more than 1,500 sales associates throughout Indiana and select markets in Kentucky. Less than one percent of all real estate firms have the longevity of F.C. Tucker. Founded in 1918, the company’s family of businesses includes a full range of real estate services—mortgages, title insurance, relocation services, a full line of insurance products, auctioning and homeowner warranty products. F.C. Tucker has earned a reputation for its exceptional service, experienced sales associates and “Golden Rule” commitment to its clients and employees.

Market Conditions

by Realty Times Staff

The National Association of Home Builders (NAHB) is reporting that a new nationwide survey indicates two-thirds of Americans support the $15,000 home buyer tax credit currently being worked in Congress.

Tuesday, the Senate approved by a vote of a 61-37 the $838 billion economic stimulus bill, bringing analysts to predict the legislation to cross President Obama's desk soon.

The survey of more than 1,200 registered voters found that one-third of all respondents and 61 percent of renters would be more likely to buy a home if the $15,000 home buyer tax credit were to be enacted into law.

"This is extremely significant because normally in any one year only about 5 to 7 percent of households purchase a home," said David Crowe, chief economist of the NAHB. "This is more evidence that this temporary, timely and targeted tax credit would trigger home sales, end the free-fall in the housing market, generate new jobs and help lead the economy back to higher ground."

Only a handful of Senate Republicans voted for the newest stimulus bill. The New York Times reported on the bipartisan issue noting Kentucky Senator Mitch McConnell, “We're taking an enormous risk -- an enormous risk -- with other people's money." He pressed other Republicans to vote against the measure, noting the bill is full of waste.

But almost all experts agree, something must be done, and soon, to aid housing and the economy.

Published: February 11, 2009

Real Estate Outlook: Sales Up in December

by Kenneth R. Harney

Mass layoffs by major employers continue to generate scary headlines, but last week housing got a long-awaited dose of good news.

After months of declining sales of existing homes -- and dire predictions by economists of more drops to come -- sales in December jumped by a surprising six point five percent.

Equally important, inventory levels of unsold housing plummeted by twelve percent, and have fallen below six months in several large metropolitan markets.

Sales in the western states increased nearly fourteen percent last month and were thirty-two percent higher than the year before. In the south, sales were up by seven percent, and in the midwest by four percent. Only the northeast states saw a decline in December a little over one percent.

Dr. Lawrence Yun, chief economist for the National Association of Realtors, attributed much of the boost in sales to sharply lower prices in many markets, combined with near record low mortgage rates.

"It appears that buyers are taking advantage of lower prices," he said, adding that the median existing home price hit one hundred seventy five thousand in December which was fifteen percent below year earlier levels.

Yun said key factors in the median national sales price drop were the high percentages of distressed sales in a number of markets. Nationwide, foreclosures and short sales accounted for about forty-five percent of December's transactions, but in some parts of California and Florida the percentage was much higher.

A Wall Street Journal quarterly survey of twenty-eight of the largest metropolitan real estate markets also turned up positive news: Unsold inventories in Washington, D.C., Houston, Denver, Boston and Dallas fell below six months, which is the level at which economists describe supply and demand as relatively balanced.

Besides the good news on the housing front last week, mortgage rates continued to hover in the five percent range -- five point two percent for thirty year loans on average, according to the Mortgage Bankers Association. Low interest rates also contributed to a slight upward tick in the Leading Economic Indicators Index from the Conference Board. Four of the ten key indicators that make up the index -- which forecasts the direction of the overall economy in the months ahead - were positive.

So is all this a prelude to an economic bottoming out and turnaround? It could be, but it's too early to say for sure. What we can conclude though, is that when we begin to see positive numbers like these for two and three months in a row, we'll know we are past the bottom and we're on a recovery track.

Published: February 3, 2009