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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