The housing market and sales prices are remaining strong in Northwest Indiana at this time, despite inflationary pressures and increases in interest rates, according to the month report from the Greater Northwest Indiana Association of Realtors.
“We’re definitely different from what we are seeing nationally in terms of sales declining for four straight months,” Pete Novak, executive director of GNIAR, said.
May 2022 saw a more than 4 percent increase in sales over the same period last year. Year-to-date sales have almost increased by 6 percent.
“It’s no surprise the median selling price continues to climb dramatically. Really the difference in our market locally versus the national numbers is we are still seeing pretty substantial price increases.,” he said.
Preliminary June numbers are remaining strong as well, he said, adding it might be the next month or two before we start to see a decline in total sales in Northwest Indiana.
Affordability may be the biggest challenge to home sales moving forward couple with a little cooling off in demand. Rising interest rates could force a decline in demand. Prices have been rising dramatically for a long time and some people may be feeling the sticker shock.
“I still think we are a little ways away from seeing prices decline. We still have a pretty major inventory issue,” Novak said.
Inventory is increasing, but still remains tight. Last year there were about 700 total homes on the market in May, this year there are more than 1,000 for sale. In terms of pricing declining Novak said the region is probably still a bit away from that.
Novak said it is hard to predict how long it may take for prices to level off or stop to drop, be it months or even a year or more.
“We still have a historically low inventory,” Novak said.
The Federal Reserve’s efforts to cool off the economy and the housing sector ultimately will have the desired effect, slowing down the market. Rising interest rates will change what a lot of buyers believe they can afford.
“Demand is still very, very strong. If you look at homes, even though there are more in sale today, those properties are still moving pretty quick. We are still seeing plenty of multiple offer situations. It just tells you there are plenty of properties still selling above the asking price,” Novak said.
Jessica Kish, broker/owner of New Chapter Real Estate in Schererville and president of the GNIAR board of directors, said she does not expect to see any sort of crash in the local real estate market.
“What we will see is a little bit of a cooling off. We are seeing things sit just a little bit longer. We are seeing a few price adjustments happening. That is something we have seen for quite some time,” Kish said.
Buyers are reevaluating their price points due to the rising interest rates. Someone that was looking for a $400,000 home now may be looking for a $350,000 home, but they are still looking, Kish said.
“We are still very, very active. I hate to call it a slowdown. I don’t think it really is,” she continued, adding before sellers may have been seeing 15 written offers for their property when now they are only seeing three. Low inventory in Northwest Indiana means homes are still selling, and relatively quickly at that. What may have sold months ago in 24 hours may now see it taking five days to sell.
There are increasing situations where buyers are writing offers contingent on the sale of their current home, but it is not stopping sales. Higher interest rates may make some homeowners who purchased or refinanced to historically low interest rate reconsider selling or buying until the rates come down again.
People who have to move will still move. Indiana also still represents a popular choice for people in Illinois looking to relocated and she does not expect that to change anytime soon. The biggest challenge to buyers will come to those on the lower end of the purchasing spectrum as the inventory of housing in the $150,000 to $175,000 remains low.
Due to rising interest rates, there may be fewer people just looking around to see what is out there, but serious buyers with a need to move will continue to fuel the market, Kish said.
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