Local housing market stays strong, but slowing nationally
It is more of the same in a strong Northwest Indiana real estate market, but industry leaders are keeping a close eye on the national market as it starts to turn a little.
“The moral of the story is it hasn’t happened here yet, but it will eventually happen to us,” Peter Novak Jr., CEO of the Greater Northwest Indiana Association of Realtors, said.
GNIAR Friday released its Local Market Update for April 2022.
He said Northwest Indiana has a bit of a buffer zone with Illinois residents driving up the demand in the region. While numbers may begin to dip, historically they are “still phenomenal positive numbers.”
Telling numbers focus on the inventory supply. In April there were 873 homes for sale in the seven-county area including Lake, Porter, LaPorte, Newton, Jasper, Pulaski and Starke counties compared to 675 homes for sale in 2021.
According to the report, there is a 9-month supply of houses available in the seven counties covered in the report. Novak said that means if no other home is listed for sale, there is less than a one month’s supply of housing available for purchase on the market. In a balanced market Novak said that number would hover around a six-toseven-month supply.
“Anything greater than eight months, it’s a buyer’s market. Five months or less seller’s market. This still shows how much of a seller’s market it is,” Novak said.
Novak turned to the last time sales numbers were as robust as they are today back in 2005, 2006 and 2007. At the time there were probably 6,000 to 7,000 homes on the market. The same numbers of homes are selling now with just 10 percent of the inventory available back then.
New listings in April dipped slightly, down
from 1,318 in 2021 to 1,257 in 2022 but remain up year to date through April for the same period last year. Year-to-date new listings through April 20201 were 3,828 compared to 4,035 in 2022, a 5.4 percent increase.
The number of closed sales also remains
strong. Closed sales in April 2021 were 845 compared to 932 in 2022, an increase of 10.3 percent. The year-todate number for 2022 is up 6.2 percent from 3,064 in 2021 to 3,254 in 2022.
Overall median sales prices continue to rise climbing 15 percent in April 2022 to $230,000 an increase over the $200,000 median sales price in 2021. Prices are up 19 percent year to date over 2021 when the median sales price through April was $189,900 compared to $225,900 in 2022.
“Prices are rising so much at some point that has to have an effect on demand,” Novak said.
People will not be able to afford the rising prices. That doesn’t necessarily mean the market is crashing or a bubble is bursting, but the market is long overdue for a price correction.
“At some point it’s inevitable,” Novak said. “At some point we will start to see a more balanced market.”
But that may take years. Inventory began declining nationally in 2014 and Northwest Indiana was no exception. The pandemic only accelerated the trend. It took six to seven years to get in the position we are in now, he said. It will take time for the market to reverse.
“I know it’s not going to be one year,” Novak said.
It remains a strong seller’s market with the percent of original list price received just shy of 100 percent in April 2022 (99.5 percent) compared to 98.7 percent in 2021. The year-to-date percent of the original list price received remained steady at 97.7 percent in 2022 compared to 97.5 percent in 2021.
It is easy to see why people are fighting so hard for homes when they find a place that checks most of their boxes.
“They are getting almost exactly what they are asking for. That’s another indicator that speaks to it being a seller’s market. There is just not being much of a discount at all. A lot of properties are going above list price,” Novak said.
He said headlines claiming demand could be falling can be misleading. While they are factually accurate, the market is still so high it could fall by 50 percent and sellers would still sell their home in a reasonable amount of time.
Novak said he did a presentation earlier in April that looked at available housing stock in Valparaiso proper and the surrounding area.
“If you wanted to be a buyer in the Valparaiso market there were 24 homes to choose from. In the greater Valparaiso area, there were 40 homes. Imagine being a buyer. Twenty-four homes. That’s once again more proof it’s a tough market to be a buyer,” Novak said.