Central Indiana pending home sales dropped 2.7 percent in March compared to the same period last year, according to the latest statistics from the F.C. Tucker Co., yet brokers say they remain optimistic as the inventory of available homes begins to balance out.
Overall, the number of pending home sales in the nine-county Indianapolis area decreased from 2,362 in March 2008 to 2,298 last month, a relatively modest drop compared to recent periods, said Jim Litten, president of F.C. Tucker’s residential division.
The average sale price also fell from $140,878 to $123,461, a 12.4 percent decline.
Litten finds reason for optimism in the numbers.
“There definitely appears to be some stabilization in the market because prior to the month of March we had seen just constant deterioration,” Litten said. “This past March, the momentum picked up.”
Much of the growth came as a result of increasing consumer confidence, low interest rates and an $8,000 federal tax credit for first-time homeowners, said John Creamer of Century 21 Scheetz.
“It looks better than I’ve seen in three years for spring selling,” he said. “I think with the lower interest rates, there’s some good buys in the marketplace. I think all those factors are causing contracts to be written.”
The number of available homes decreased by 15.6 percent in March, compared to the prior period, helping to balance inventory with demand. A total of 15,562 homes sat on the market last month, 2,881 fewer than in March 2008, according to the F.C. Tucker report.
Buyers flocked to homes priced below $300,000, said G.B. Landrigan, president of Landrigan & Company Realtors, which compiles its own market data.
“Basically, the places that had an increase in the available months of inventory … tended to be higher priced areas,” he said, such as Washington Township, and Hamilton and Boone counties. “The less expensive areas are the ones where the absorption rate improved.”
For instance, while there remains a 6.8-month supply of houses in the overall Indianapolis region, those figures vary dramatically by price level.
A 5.9-month supply exists in houses priced below $299,999, Litten said. But there’s a 15.6-month supply in the $300,000 to $499,999 range.
Move one level higher, to houses priced between $500,000 and $999,999, and the figure spikes to a 27.9-month supply.
The explanation for such a gap is simple, Litten said.
“The lower the average sale price, the better chance for a quicker recovery,” he said. “The higher the price range, the slower the recovery will be.”
A market is usually considered balanced when it has a four- to six-month supply of houses, he said.
Despite the ongoing challenges in the market, Litten says he’s upbeat about the future.
“It’s not going to be a Saturn rocket taking off,” he said, “but I do think we’re going to see more positive numbers as we move through the year.”