EVANSVILLE — The pandemic is weakening many U.S. industries, but homebuilding and real estate aren’t among them.
Whether out of boredom, necessity, or some other reason, many Americans who have financial resources to do so upgraded their living quarters during 2020.
In Southwest Indiana, new home construction exceeded that of 2019, when nobody had heard of coronavirus. There were 306 new house starts in Vanderburgh County for 2020, up from 268.
Warrick County had 253 starts in 2020, up from 246 in 2019. Warrick’s total for 2020 does not include December’s total, which is not yet available.
Activity was busiest during summer months, but the mild climate kept builders on job sites throughout the year, according to data provided by the Southwestern Indiana Builders Association.
“These numbers are pretty good for our market,” said Bill Pedtke, director of SIBA. “There are many benefits from this type of investment. There is job creation, and the dollars spent on construction tumble locally longer than other types of expenses.”
Because of the pandemic, many people likely diverted more income into housing needs than items such as travel, Pedtke said.
He noted the pandemic forced more home-based working and schooling, so it was a good time to make improvements on the homefront.
The same trends also boosted real estate sales.
Low interest rates and high demand made it a superb time to sell a house, although buyers were challenged by low inventory. Locally and nationally, countless homes were snatched up shortly after hitting the market.
Vanderburgh County’s number of properties sold grew 3% in 2020, from 2,661 to 2,806.
Warrick County’s gain was 2%, from 1,002 homes sold in 2019 to 1,019 last year.
Across the 11 counties covered by the Southwest Indiana Association of Realtors, sold properties increased 3% from 5,611 in 2019 to 5,798 last year.
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Average sale prices also increased.
In Vanderburgh County, the average went from $151,543 in 2019 to $165,142 in 2020, while in Warrick, the bump was $227,715 to $240,168. Across 11 counties in Southwest Indiana, the average sale jumped from about $163,000 to nearly $179,000.
The parents of a newborn, Jake and Presley Mischler were eager to move from their small apartment to a new house Evansville’s West Side. But to get one they wanted, the first-time buyers had to act fast.
“It was different than I thought it was going to be,” Presley Mischler said of her home-buying experience. “I thought we would have all these houses to look at. But everything went so quickly.”
The Mischlers toured a house and fell in love with it. Since the property already had offers, their Realtor urged them to make an offer immediately.
It had been on the market only a day.
“We didn’t have much of a choice, we had to decide whether to put in an offer right then because if we waited a day it would have been gone,” Presley said.
The couple also quickly penned a letter, telling the sellers how much they liked the house. They mentioned they were first-time buyers with a small child, and they were Mater Dei High School graduates.
“They picked our offer,” Mischler said, adding it helped that the sellers also “were Mater Dei people.”
Dan and Rachel Walters experienced the real estate market from both a buyer's and a seller's perspective in 2020. The couple has college-age children, so with interest rates low, they decided to put their house in northern Vanderburgh County on the market and then look for one a bit smaller.
Their former house, which the family was in for 21 years, was on the market less than a day. That meant they had little time to find a new one.
"We didn’t expect it to go that fast, so we had to do some scrambling and find something quick," Dan Walters said. Their new house isn't too far from their old one.
The combination of low interest rates and new, pandemic-driven lifestyles helped drive the housing market in 2020, and "being able to sell at a higher price is definitely a motivator for people to sell," said John Czoer, president of the Southwest Indiana Association of Realtors for 2021.
Czoer, who is with First Class Realty, said the same trends that drove 2020 are likely to continue early in the new year. He said the longer-term outlook for 2021 largely depends on what direction the pandemic takes.
The current buying environment requires some patience, said Czoer.
"If you hook up with a right Realtor, they'll guide you through the process," Czoer aid. "But it is frustrating because of the lack of inventory."
Further illustrating low inventory, the total number of homes listed in Southwest Indiana fell 7% during 2020, even though total sales in the 11 counties grew 3%.
Local buyers are showing they are willing to pay top dollar for houses they want, said Gretchen Muchnick, co-owner of F.C. Tucker Emge Realtors.
Even though the supply of homes for sale is low, Muchnick said those who are selling "still need to take those steps to make sure your home is market ready."
The outlook for 2021 depends greatly on interest rates, as well what direction the pandemic takes, according to Realtors.
Those working in the field are taking COVID-19 precautions seriously.
"We're offering things like virtual tours, FaceTime with clients," Muchnick said. "There are all sorts of ways we continue to conduct business and keep everybody safe."