South Bend area residential market shows no signs of cooling off
With continuing low interest rates and no prospects of an economic slowdown on the horizon, those involved in South Bend, Ind., real estate are optimistic the residential real estate market will remain robust for the foreseeable future.
"Barring any major global event that's beyond our control, people are optimistic and investing in real estate," said John De Souza, president of locally based Cressy & Everett Real Estate. "We have a very liquid market that allows people to easily move."
A continuing shortage of new residential properties — especially those below $300,000 — means houses priced below that price point are selling rapidly if they have been well maintained and are priced right, De Souza said.
The shortage of new housing construction is generally the result of the limited number of builders and subcontractors in the region. Many left the business during the Great Recession and haven't returned.
As a result, those who remain in the business are focusing primarily on luxury homes, which are priced well above $300,000 and provide better profit margins. In addition, higher prices for building materials and consumer demand for expensive features such as solid-surface flooring, granite and other features are also pushing up the prices for new homes.
That shortage of new inventory has pushed up demand throughout the market, especially in the $150,000 to $300,000 price range, said Jim Dunfee, broker-owner of Weichert Realtors-Jim Dunfee and Associates in South Bend.
"It's not uncommon to get multiple offers on a property that's priced right," Dunfee said. And in some cases, buyers will include a clause that they'll beat any other offer that comes in up to a certain dollar amount.
According to the Indiana Association of Realtors, the median sale price for a home — including condos, town homes and co-ops — sold in 2019 increased to a record-setting $169,900 across the state, a 7.2% increase compared to 2018, and 96.4% of what sellers were asking for.
In St. Joseph County, the median sale price increased 7.4% to a record $145,000 from $135,000 in 2018 with seller's getting 97.4% of their asking price. In Elkhart County, the median sale price went up 4.6% to a record $160,000 from $153,000 in 2018 with sellers getting 97.9% of what they were asking.
And strong demand for residential property has percolated throughout the market, even for starter homes.
"One of our agents listed a property this week at $72,500 on College Street on the west side of South Bend," said De Souza. "Within a day, there were seven offers because the house is in great shape."
With unemployment in the South Bend and Elkhart areas remaining below the national average and housing inventory on the low side, Dunfee and De Souza don't see the market shifting any time soon.
The Indiana Association of Realtors has the same belief.
"December was a strong month for home sales statewide, pulling 2019 ahead of the record-breaking year before and not surprising many," said Bernice Helman, a Terre Haute Realtor and president of the state association.
"Not surprising is the fact that prices are still on the rise," Helman said in a release. "Inventory has yet to satisfy demand and competition for quality homes remains fierce."
In the greater South Bend area, there is no location where competition is more fierce than near the University of Notre Dame, Dunfee said.
"People are coming out of town and don't care about money," Dunfee said. "The market around Notre Dame has become ocean-front property."