By Aleasha Sandley, Herald Bulletin Staff Writer
February 14, 2009 06:27 pm
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ANDERSON — High foreclosure numbers and the difficulty of getting a home loan have drawn national attention, but Madison County’s real-estate market is holding up better than others.
“The picture being painted by the national media is all doom and gloom, and that’s just not the reality,” said Jim Bittner, president of the Anderson/Madison County Association of Realtors and broker/co-owner of the Anderson Re/Max Real Estate Group. “There are wonderful values on the market in Central Indiana.”
Bittner said recent statistics show Madison County with a 1.5 percent reduction in property value while others had substantially higher rates.
“Although Madison County has seen decreases, they’re certainly no larger than decreases that have been evident throughout the entire Indiana market,” said Scott Sparks, branch manager of Anderson’s Carpenter Realtors. “Madison County is certainly not singled out. There are many areas of central Indiana that haven’t done as well either, so we really have held our own.”
Both Bittner and Tom Ross, co-owner of Anderson’s Century 21 group, were hesitant to define the current real-estate situation as a buyer’s market, instead saying sellers could fare well in the market as long as they list their homes correctly.
“If it’s leaning one way or another, certainly it’s a buyer’s market,” Ross said. “The seller’s going to take a little bit of a hit today because prices have dropped and value has taken a little bit of a hit.”
Bittner said price, location and condition all affected how well a seller could do in today’s market.
“The secret to success in the market we’re in right now if you’re selling is to price your house right,” he said. “Establish true market value. If you’re even a little bit overpriced, it will just languish.”
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Past housing woes
One reason Madison County doesn’t seem to have been hit as hard by the housing crash as other areas of the country is because the county went through many of its hard times several years ago when General Motors left town.
“What’s different about our market is that back in the day years ago when other areas of the country were experiencing this wonderful appreciation in home prices, we never had quite that much appreciation,” Ross said. “The tumble wasn’t quite as bad for us this time because we were kind of low to begin with. Our market is lower than it should be, but not to the devastating effect that other areas of the country are experiencing.”
Madison County home prices have dropped about 15 percent as opposed to other areas of the country where they have dropped 20-25 percent, said Ross, whose real estate group had more than 30 sales last month.
Although the market isn’t booming, the worst Ross has seen was in 1981-82 when interest rates were close to 15 percent and unemployment was at 17 percent.
“The type of market that we have is different from any that we’ve experienced in recent years because there are lots of foreclosures and short sales,” he said. “We’re still selling homes. It’s not what I would call standard booming business, but it’s not the worst market I’ve ever seen.”
A short sale occurs when the proceeds from the sale of a piece of real estate are less than the balance owed on the loan for the property.
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Historically low rates
One factor in keeping the market afloat has been historically low interest rates, recently bottoming out at four and seven-eighths of a percent.
“It’s a great time to be a buyer because interest rates are good and supply is such that you can get a reasonable price,” said Mike Baker, president of First Merchants Bank of Central Indiana.
Baker said so far this year, refinancing activity has been strong as consumers take advantage of lower interest rates, and purchase activity has been reasonable for this time of year. Generally, he said, this time of year is when banks see more activity regarding purchasing and construction of homes.
Due to the subprime mortgage practices of financial institutions across the country — which ultimately led to homeowners living beyond their means and having their properties foreclosed upon — requirements to qualify for a home loan have been tightening in recent months.
“Those requirements are tightening and really returning to some of the more traditional underwriting standards that we’ve seen in the past, which is a positive thing,” Baker said. “The steps are still pretty much the same; it’s just the parameters are a little narrower. I wouldn’t say there are additional hoops to jump through.”
Sparks said the county’s inventory of homes for sale has been dropping; it was at 946 single family and condos as of Friday, one of lowest numbers in the last five years.
“Inventories have dropped, which is really a good sign for the market,” he said. “You have to have inventory stabilization before you can start seeing a strengthening in market values.”
Bittner said any tax credits that are passed through a national economic-stimulus plan would be a boon for the real-estate business.
“That will create all kinds of activity, and people will start looking like crazy for houses,” he said. “The real-estate business tends to lead the economy. If we stimulate home-buying activity, that helps substantially nationally.”
Ross is confident the local housing market will get better as the year continues.
“I wouldn’t say the housing market has bottomed out, but I do think there is light at the end of the tunnel,” he said.
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Contact Aleasha Sandley: 640-4805, aleasha.sandley@heraldbulletin.com.
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Madison County home sales
2006: 1,651
2007: 1,573
2008: 1,314
Change between 2006 and 2008: -20.4 percent
Source: Metropolitan Indianapolis Brokers Listing Cooperative
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National home sales
2006: 6,478,000
2007: 5,652,000
2008: 4,912,000
Change between 2006 and 2008: -24.2 percent
Source: National Association of Realtors
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