Consumer Confidence Reflected in 2nd Quarter Indianapolis Housing Sales

by David Caveness

Housing has recovered in central Indiana. The recovery is complete as pended home sales during the second quarter of 2015 hit a record high. With the Consumer Confidence Index now above 100, at levels last seen during the housing boom of 2003 through 2006, it’s clear that consumers are over the recession and beyond the “housing depression” of 2008 through 2012.

The Second Quarter 2015 edition of the Carpenter Report shows us that for central Indiana, the numbers for the second quarter reflect the increased consumer confidence. Home sales – measured in pended sales – were up 12.1% over 2014. Shelby, Boone and Madison Counties led the surge in pendings. Closed sales units were up 5.4% for the same period. We will see this number rise as the pended sales referenced above begin to close.

However, the inventory of available homes for sale was down 5.7% year-over-year for the second quarter. Nine of the eleven Counties in our report decreased. Weakness in the number of homes on the market continues to be a problem for prospective home-buyers as selection decreases and competition for available homes increases. The lack of new home construction adds to the pressure on inventories.

We expect to see a modest slowdown from these lofty sales levels during the third and fourth quarters. Seasonal trends coupled with anticipated rising home mortgage rates in September should slow sales during the second half of the year.

While we anticipate a modest slowing of the housing market over next few months, we believe the market will remain strong and healthy for an extended period. Unlike the “housing bubble” years of 2003 through 2006, we are not seeing reckless lending or artificial stimulus driving the market. We are experiencing growing consumer confidence on a solid foundation of a recovered U.S. economy.

We hope this edition of Carpenter Reports and the data provided is helpful in your understanding of today’s residential real estate market in central Indiana.

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