Indianapolis Housing Market = Recovered

Indianapolis Housing Market - Carp Report cover 2nd QOur newest “Carpenter Report“, a view of conditions of the homes for sale market in central Indiana has been released.

In it, we see that the central Indiana real estate market has moved from “recovery” to “recovered.” We continue to see in the data presented in this report that the local housing market has reached the “recovered” stage of the housing cycle. Year-over-year listing inventories continue to decline, down an additional 14.6% year-over-year. Nine out of the eleven counties represented showed a decline in listing inventory levels. This continued decline in inventories is a prerequisite for the establishment of a “recovered” housing market. In recent weeks, however, we are beginning to see inventories solidify with a possible upward bias. Hamilton County with a 25.2% decline and Hendricks County with a 21.0% decline lead the pull-back in inventories. Marion County, as the largest county for inventory, saw a 14.6% decline.

The “recovered” stage is reflected in the pending numbers as well. Pending sales during the second quarter of 2013 were up 28.8% year-over-year on top of strong year-over-year comparisons last year. Boone, Hamilton, Johnson, Montgomery and Morgan Counties leading the way with year-over-year growth of 30% or greater. In addition, Marion County experienced a 26.8% growth in pended sales. These pending sales levels for the 2nd quarter put the central Indiana housing market at or near the pre-recession peak levels of 2006 and 2007.

The average residential sales price for closed sales in central Indiana showed strong improvement with a 4.8% increase year-over-year. Madison and Hancock Counties led the recovery in sales price with 11.9% and 8.2% increases respectively. Marion County, the largest in the survey, experienced a solid but more modest 3.5% increase. These increases in average sales price are strong indicators the bubble of bank-owned and distressed properties has worked its way through the system and we are returning to a more balanced market. Don’t misunderstand, there is still a surplus of distressed and bank-owned property working its way through the market. We anticipate the continued strengthening of home prices in the coming quarters.

As the Federal Reserve moves to reduce their current economic stimulus known as “QE,” we do anticipate some modest slow-down in sales activity due to the impact of rising mortgage interest rates. We do not believe it will derail the momentum established over the past two years. At Carpenter, we continue to be optimistic about the future of housing in central Indiana. The much improved picture presented in this report fuels our optimism.

We hope you find this quarterly edition of Carpenter Reports and the insight it might provide useful in your understanding of the central Indianapolis housing market.

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