First-time homebuyers boosting residential sales

Low-priced homes and foreclosures are driving a large chunk of residential real estate sales in Indianapolis, largely due
to first-time home buyers taking advantage of a federal tax credit, according to a report released today by Re/Max of Indiana.

Through August, 68 percent of homes sold in the nine-county Indianapolis area were priced under $150,000, up from
43 percent in 2008.

Re/Max attributed the higher number to an $8,000 tax credit available to first-time home buyers.
The credit expires Dec. 1.

“It’s definitely driving sales, absolutely,” Re/Max Select agent
Brian DeMarco said. “We’re definitely seeing a lot of people wanting to become first-time home buyers.”

DeMarco said homes priced under $150,000 comprise a large percentage of Indianapolis-area homes anyway. In August,
the average home price was $146,999, a 1.3-percent increase from the same month last year.

About 8,000 homes on
the market in the 9-county area are priced under $150,000.

In Marion County, the average home price last month
was $109,597, up 1.2 percent from a year ago.

Sales of foreclosed properties, which typically sell below market
prices, made up 22 percent of area home sales in August. While still relatively high, the percentage has fallen steadily since
a peak of 46 percent in January.

“It got as bad as nearly half of all sales involved a foreclosure,”
DeMarco said. “Realistically, we are still currently working with banks a lot more than we used to.”

The average price of a foreclosed home in the Indianapolis area in August was $66,885. 

The number of foreclosed
homes being sold locally is outstripping the number coming on the market, which is good news for the housing market, DeMarco
said.

Overall, the number of active listings in August fell 15.5 percent from the year-ago period, to 16,234,
according to Re/Max.