The supply of new and existing homes for sale in the Indianapolis region is falling, according to the latest statistics compiled by the F.C. Tucker Co., raising hopes that the market is finding a healthier balance between supply and demand.
The statistics showed a 14.3 percent decline in residential home inventory in December. While there remains a nearly 10-month supply of housing for sale, still higher than the four- to six-month optimal level, F.C. Tucker’s Jim Litten said he’s hopeful.
“Most of the economists have said all along that we won’t see the real estate market turnaround until the inventory of homes comes back in line,” said Litten, president of the firm’s residential real estate division. “It still has a ways to go before the market totally gets balanced, but it appears we’re moving in the proper direction.”
A total of 15,600 homes were up for sale in the nine-county region at the end of December-2,605 fewer than the same period last year. The drop in inventory came as home builders slowed new construction and weary sellers pulled their properties from the market, waiting for the economy to improve, Litten said.
Overall, 1,411 central Indiana homes sold last month, down from 1,452 in December 2007. Hendricks County reported the sharpest decline in sales, with a 26.4 percent reduction. Sales did increase, however, in three area counties: Johnson, Hancock and Marion.
Still, Litten said low job stability and a decline in consumer confidence continue to challenge brokers.
A housing stimulus from the federal government could give residential real estate a needed boost, he said.
“I do think that we are going to see come kind of stimulus package coming out of Washington,” he said. “Whether it will be enough to correct the challenge that we’ve had-that’s the $64,000 question.”
He predicted that Indiana would be one of the first states to see improvement once the general economy picks up, since this region experienced the real estate slowdown relatively early in the spring of 2006.
“Almost every economic slowdown that our company has experienced, residential real estate has led the country out of it,” he said.