Not enough houses for sale driving up prices in Indianapolis

The story of the Central Indiana housing market has remained remarkably consistent for several months: There are too few houses for sale and prices keep going up, up, up.

Pending sales spiked 11.8 percent from May to June even as inventory continued to decline across 15 counties tracked by F.C. Tucker Co. There were 8,406 houses for sale in the region, down 17.7 percent from a year earlier, according to F.C. Tucker. Marion County's inventory was down 23.8 percent to 3,085 listings.

Even as homes sell faster, and for higher prices, experts insist that the U.S. housing market is not reaching bubble territory. F.C. Tucker President Jim Litten in a statement sought to "reassure buyers that although inventory remains limited, there are still many great housing options available."

If so, buyers might have to move faster and be willing to spend more money than they would have had to a year ago.

Average year-over-year prices rose in 13 of 15 counties in Central Indiana last month. Marion County homes sold in June for an average of $157,400, up 7 percent over the previous year. Hamilton County once again had the region's highest average sale price at $300,840, up 6.9 percent, followed by Boone County at $296,648, up 3.7 percent.

Shelby County was the only doughnut county in which the average sale price dropped — by 2.2 percent to $126,612. With 59 homes sold, though, Shelby County offers a smaller, more volatile sample than more populous Indianapolis-area counties.

Across Central Indiana, homes sold in an average of 65 days during the first six months of the year — 11 days faster than the first half of 2016. Johnson County homes are selling in an average of 60 days; Hendricks County homes in 61 days; Hamilton County homes in 62 days and Hancock County homes in 63 days.

The Central Indiana housing market is consistent with trends across the U.S. The S&P/Case-Shiller index, which tracks prices across 20 cities, on Tuesday showed U.S. home prices increased by an average of 5.7 percent in May.

"Home prices continue to climb and outpace both inflation and wages," David Blitzer, Managing Director the Index Committee at S&P Dow Jones Indices, said in a statement. "Housing is not repeating the bubble period of 2000-2006: price increases vary across the country unlike the earlier period when rising prices were almost universal."

Blitzer attributed soaring home prices to a lack of listings — there is only a four-month supply of existing homes on the market — and a sluggish pace for new home construction.

The average sale price in Central Indiana, which is not tracked by the S&P/Case-Shiller index, rose 6.1 percent to $196,627 in June, according to F.C. Tucker.

Luxury home sales have especially picked up this summer in Central Indiana. Two homes sold last month for more than $2 million and 14 sold for between $1 million and $1.9 million.

Price growth has persisted even as mortgage rates have gone up during the past year. The average 30-year mortgage rate last week was 3.96 percent, up from 3.45 percent a year earlier, and the average 15-year rate was 3.23 percent, up from 2.75 percent, according to Freddie Mac.

"Indiana's housing market is strong and is on track to remain so through the duration of 2017," Litten said.

Tribune Content Agency
Purchase Real estate Indiana
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