Healthy Bartholomew County housing market bucks national trend

By Boris Ladwig, The Republic

bladwig@therepublic.com

  Who needs an economic stimulus package, anyway?

   The dreaded sub-prime mortgage lending leviathan seems to have crushed much of the nation and, economists fear, will use his giant claws to push the U.S. economy into a recession.
   The monster stomped on the nation, where the median home price in the third quarter fell 3.7 percent from a year earlier, and new single-family home construction plunged nearly 30 percent last year.
   The monster must have just tiptoed in Indiana, as the median home price rose 0.9 percent in the third quarter, although new single-family home construction fell nearly 18 percent last year.
   But Bartholomew County must have slipped underneath the fiend's hammer toe, because median home prices have risen, and home construction is holding steady.
   Indiana escaped the cataclysm experienced by typically hot real estate markets, because those had been propped up mostly by investors who often bought homes without living in them just to sell them a few months later for a profit, said Rick Wajda, chief executive office of Indiana Builders Association.
   Investors stopped investing because markets appreciated more slowly or even depreciated, Wajda said, which left those regions with lots of homes and little demand, resulting in further declines.
   Indiana generally enjoys a steadier market, he said, although some Hoosier builders are struggling.
   A few years ago people rushed to buy homes, partially because of historically low mortgage rates.
   When interest rates ticked up and job losses widened, some of those who, under ideal conditions, barely could afford their homes no longer could make their payments.
   With uncertainty in the market, even those who want to upgrade have to wait because they cannot afford a $200,000 home until they've sold their $100,000 home, Wajda said.
Strong local economy
   In Bartholomew County, the value of home sales increased, year-over-year, by 3 percent to nearly $166 million.
   The median home price, at $139,000, gained 8.7 percent, and the average price, at nearly $174,000, jumped more than 13 percent.
   Credit the local economy, building and housing, experts say.
   The Columbus market's stability has been anchored by economic stability and job growth, said Vicky Gelfius, president of Columbus Board of Realtors and Jeff Finke, owner and principal broker of the Jeff Finke Realty Team.
   For example, the county's largest employer, Cummins Inc., is expected to report in about two weeks its fourth consecutive record year, and is preparing its former flagship Plant 1 for a new lightduty diesel engine project that is expected to employ about 800.
   Downtown Columbus is undergoing extensive construction with new hotels and the revamping of The Commons Mall.
   Successes of less visible manufacturers, such as Toyota's forklift plant and NTN Driveshaft near Walesboro, and entities outside of manufacturing, such as Columbus Regional Hospital and LHP Software, also have buoyed the local economy.
   While the national unemployment rate rose to 5 percent in December, with nearly 800,000 more people looking for a job than a year earlier, Bartholomew County's rate fell to 3.4 percent, and local year-end statistics indicate that last year's job market was the best since at least 2000 - even without the yet-to-be-filled jobs at Plant 1 or with Honda in Greensburg.
   With a strong local economy, people keep moving in and buying homes, said Gelfius. And people who already live here feel secure in their jobs and eagerly are trading in their homes for bigger ones.
Cause for concern?
   And, Finke said, national numbers have been skewed somewhat by recent successes.
   National sales figures and home values have declined - but from historic highs, which means that despite significant declines, the numbers are still good historically.
   "You can't continue record sales forever," Finke said.
   Two drops of local bitterness: