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Indy home sales likely slowing to 'new normal'

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Home-sale agreements tumbled 14.9 percent in the nine-county Indianapolis area in June, the tenth straight month deals have decreased.

Pending sales of existing homes dropped from 2,994 in June 2013 to 2,549 in June 2014, real estate agency F.C. Tucker Co. reported Wednesday morning. Sales for the first six months of the year are down 12.5 percent from the first six months of 2013.

“When comparing this year’s sales numbers to last year’s, it’s important to consider that 2013 was the fourth best year in Indianapolis real estate history,” said Jim Litten, president of F.C. Tucker Co., in a prepared release.

“In 2013, we were still recovering from the previous cycle of the housing downturn, so last year’s spike in sales was tremendous. I believe we’re likely approaching a ‘new normal’ where sales growth will be less dramatic moving forward,” Litten said.

Area home prices continued to rise, however. The average year-to-date sale price in June for the metropolitan area was $173,393, a 7.4-percent jump from $161,460 in June 2013.

Considering the rising prices, the market displayed some counter-intuitive behavior in June as the number of available homes also increased. There were 12,000 homes on the market in June, 298 more than in June 2013—a bump of about 2.5 percent.   

Pending sales were down in six of the area’s nine counties in June, compared with the same month last year. Marion County, by far the most active market, saw a 12.1 percent drop in sale agreements, from 1,217 homes in June 2013 to 1,065 last month.

The average year-to-date sale price in the county has grown 8.5 percent, from $124,320 in 2013 to $134,835 this year.

The biggest declines in pended sales came in Boone County, dropping 42.5 percent from 120 homes to 69 homes, and in Hamilton County, where agreements sank 22.6 percent from 731 to 566. Deals fell 20.9 percent in Hendricks County, to 231 homes.

Among the three gainers, Madison County led the pack with a 15.3-percent jump to 143 homes.

One home priced above $2 million sold in central Indiana in June. Ten homes fell in the range of $1 million to $2 million. Close to half of the pended sales in the area (1,182) took place in the $100,000 to $199,999 price range.
 

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  • not so counter-intuitive
    Although article states some counter-intuitive market behavior, I don't see it that way. Yes, typically shrinking supply would cause higher prices, but we all know that people were upside-down on their mortgagtes, and generally waiting for prices to pick up in order to list. So, this was expected.
  • actually
    inflation around 4% would be very good (to decrease cash hoarding, encourage investment, somewhat "devalue" debt) vs. current Fed target of 2% (and actual inflation even below that).
  • infllllaaatttion
    for all the remarks on inflation...inflation above standard 2-3% isn't good. this country's debt and spending will catch up to us. the only thing that's not inflating under obama is worker's wages.
    • Gas prices high?
      All things considered, the $3.48/gallon I paid this morning is the same as the avg. price paid almost 20 years ago: http://inflationdata.com/Inflation/Inflation_Rate/Gasoline_Inflation.asp
    • Not surprising
      Prices rising but sales are down. Decreased inventory. Fewer people can qualify for a mortgage. Grocery prices through the roof. Middle class has to spend their money today on gas and groceries, oh, and health insurance. Times are tough and I think will get much tougher. Can't wait until November. Hopefully we will elect some sense into the powers that be. Vote at all costs or do not complain when you can't buy an avocado because you can no longer afford it. Better start taking the bus. Oh wait! They are talking about stopping the commuters from Fishers and Carmel because they are losing money. Gas prices have remained high for a long time now. Ugh!!
    • Anything's possible
      for the decline...including a little to do with greedy/unrealistic sellers. I went to a couple open houses near my house and was totally shocked at the asking prices. And those homes are still for sale not surprisingly.

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