The Herald Bulletin

March 23, 2013

Real estate of the union

Professionals optimistic that local, state home markets are rebounding

By Baylee Pulliam
The Herald Bulletin

ANDERSON, Ind. — When it comes to real estate, the key is location, location, location.

And for the past few years, that was a key that homes in Madison County just didn’t have. The number of closed homes sales was waning, and the average sale price dipped to $74,209 in 2009.

But that might be changing.

“I’m pretty optimistic,” said Tom Seal, of F.C. Tucker/O.C. Clark Realtors, who spoke on the local real estate market at a Madison County Builders’ Association luncheon last week at Anderson Country Club.

“Madison County, like everywhere else, has its ups and downs over the years,” he said. “But I don’t think things are as bad as people think they are.”

For example, more local homeowners hung the “for sale” sign for the first time in 2012 than the year before — 267 of them, in fact, a 13.9 percent gain on 2011.

But does that mean people are leaving the county in search of greener pastures? Maybe not.

While more locals put their homes up for sale in 2012, even more people bought them, he said.

According to the Indiana Association of Realtors, there were 1,331 Madison County closed home sales in 2012, a 26.2 percent gain over the 1,055 the year before.

There are other indicators of a recovering local homes market, he said, including a boost in the average sale price — $82,402 in 2012, as opposed to $75,898 in 2011 — and the number of homes sold for over $150,000, which was 168 in 2012, nearly double the 96 sold in 2011.

Prices are on the rise across the state, driven by limited supply and high demand.

“Inventory is tight across the state,” said the Association in January. “This, combined with strong buyer demand, is causing home values to increase – great news for sellers and potential sellers.”

In Madison County, sellers are leaving the table with a bigger share of their original asking price — 86.2 percent in 2012, a 0.6 percent gain over 2011.

“But, borrowing costs are still cheap and the affordability picture remains extremely attractive – great news for buyers, as well,” the Association said. “Continued cheap borrowing costs and real employment and wage growth will be the fuel to the residential real estate fire.”

Mortgage rates averaged only about 3.66 percent in 2012, according to Freddie Mac. Compared to the 16.675 percent, thirty-year high in 1981, “it’s cheap money,” Seal said.

That’s one reason people are borrowing more, paying more and buying more houses.

But while Madison County’s real estate market continues to improve, “new construction has still suffered,” Seal said.

The cost of new construction continues to rise, he said, although the average sales price is only now starting to recover.

“There’s a gap between the costs and profit,” he said. “You have to really want to build.”

But there’s also proof new construction, as a whole, is making a comeback.

The number of building permits issued in the nine-county, Central Indiana area last year hit 4,182, a 16 percent increase over 2011. It was the first time since 2008 that number topped 4,000, and the largest year-to-year increase since 1998.

“There’s a lot of uncertainty and a lot of factors” that play into the future of real estate in Indiana, Seal said. “But I’m optimistic.”

Find Baylee Pulliam on Facebook and @BayleeNPulliam on Twitter, or call 648-4250.