Northwest Indiana real estate market ends 2016 with growth in new homes, sales

"We haven't matched the number of transactions in the peak years, but we have done better in the price of homes," said Peter Novak Jr., CEO of the Greater Northwest Indiana Association of Realtors.

According to statistics provided by GNIAR, 10,970 houses were sold in its seven-county region at a median selling price of $147,000 last year. This reflects a 10.6 percent hike from the 9,915 housing units sold in 2015 and a 5 percent jump from the $140,000 median selling price.

The seven counties include Lake, Porter, LaPorte, Newton, Starke, Jasper and Pulaski.

Novak said the most homes sold in GNIAR's coverage area in one year was 11,588 in 2006, during the housing bubble.

He said the region previously reached its peak median selling price for homes in 2007, at $134,000.

"We surpassed that peak in 2014, and 2015 and 2016 were even better," Novak said.

Lake, Porter hot markets

Lake and Porter counties' percentages practically mirrored those on the seven-county level, according to the GNIAR statistics.

Lake County had an 11.5 percent bump in the number of houses sold, from 5,670 in 2015 to 6,320 in 2016. The median sales price increased 5.1 percent, from $138,000 to $145,000.

Porter County's percentages were even closer to area-wide numbers, with a 10 percent jump in the number of houses sold and a 5.2 percent hike in median sales price.

There were 2,333 units sold in 2015 at a median price of $171,000, compared to 2,456 houses sold at a median price of $179,899 in 2016.

Novak said Lake County sales are due in part to buyers crossing the Illinois border.

"Lake County is getting the highest percentage of Illinois transplants," Novak said, pointing out that Porter County is farther away from the Chicago job market.

Kim Odegard, a Schererville resident and Realtor, said Illinois residents make up a large portion of her client base.

"About 25 (percent) to 30 percent of my business last year was people from Illinois coming this way and there are a number of people in the pipeline looking to do the same," Odegard said.

New homes on the rise

Vicky Gadd, executive officer of the Home Builders Association of Northwest Indiana, said the Construction Market Report showed a 13 percent hike in the number of construction permits taken out in Lake, Porter and LaPorte counties as of the end of October.

There were 1,152 permits taken out in 2016 compared to 1,019 in 2015.

She said this compared to a 14 percent hike in the number of construction permits taken out state-wide, according to the Indiana Builders Association.

Gadd said housing is expected to be on an upward steady path.

"Builder confidence is better," she said, adding builders are waiting to see what effect an expected mortgage rate hike would have on the market.

Gadd said she had no data on whether any new subdivisions are going up.

"But new construction is still hot in St. John and Crown Point," she said.

Novak said a tight inventory is driving up the price of homes and the inventory gets even tighter during the winter months.

"We were having around six months supply of inventory and now it's under five months, at about 4 1/2 months. It's a really tight market in terms of homes available," he said.

He said new construction typically provides a relief valve in this instance, but there aren't as many new homes going up.

Looking forward

Novak said inventory will remain tight in 2017, according to various economists.

"They agree it's a great time to sell. At the end of the day, we need more sellers to satisfy demand," Novak said.

He said some economists are also predicting there will be another downturn sooner or later, but it won't have as great an effect on housing as the last recession did.

"One of the biggest differences is that before, we had a very high supply of inventory, too," Novak said. "When demand fell dramatically because of the recession, we were left with a very high level of inventory. We had to slash prices to sell them," he said.

Now, he said, there is a very high demand but not a large inventory.

"If demand went away, prices would fall, but there would be less price slashing," he said.

Odegard said 2016 was her best year since she started in real estate in 1992 and her expected closures are already up from last January.