Northwest Indiana’s real estate market is starting to reflect the five-month national trend of slowing home sales.
Peter Novak, chief executive officer for the Greater Northwest Indiana Association of Realtors, said while the region bucked the national trend of declining sales for a while, the dip now being seen was expected.
“I think that the shoe has finally dropped in terms of closed sales dipping,” Novak said. “We are definitely seeing a bit of demand slip versus where we have been the past few years.”
New listings in June were up 4.1 % to 1,513 over June of 2021 with 1,454. Year to date 6,905 homes have come on the market in Northwest Indiana in 2022 compared to 6,603 through June 2021. While the number of houses on the market increased, the number of closed year-over-year sales had dropped from 1,217 in 2021 to 1,045 in 2022, a 14.1 % decline, according to GNIAR’s Local Market Update for June 2022.
Pending sales are up 61.4 % this June compared to 2021, with 1,123 homes listed as pending compared to 696 last year.
Novak said the Northwest Indiana market, which includes Lake, Porter, Jasper, LaPorte, Newton, Pulaski and Starke counties, remains far from balanced and far from crashing. Demand is falling back due to the higher interest rates and the rise in housing prices, but remains strong in general, Novak said.
“Inventory remains an issue,” he said.
Typically, there is a six- to seven-month supply of houses in a balanced market. Currently there is a little less than a one-and-a-half-month housing supply in the regional. The current inventory of homes on the local market is 1,381 this June, up from 929 in 2021, representing a 45.4 % increase, according to GNIAR’s monthly real estate report.
“It is still by far a sellers’ market,” Novak said, adding the metrics are beginning to move a little bit away from that.
Comparing 2022 sales numbers with those from 2021 can be a little misleading.
“(2021) was kind of historic to be honest with you,” Novak said.
“Things are certainly less heated than then, but we are still a desirable and heated market,” Novak said. The question is will that continue, he said.
While sales are down, prices are still rising, and buyers looking for a home are still competing heavily for that property. Sellers may be getting a little less than they asked for, but in a normal market that is not uncommon.
According to the latest GNIAR report for June, the % of original list priced received has dipped slightly year over year but remains strong. Sellers were getting on average 100.8 % of their asking price in June 2021 compared to 98.9 % this June, a 1.9 % decline. Year to date, the decline is 0.6 %, with 98.8 % of sellers getting the original asking price through June 2021 compared to 98.2 % this year. In a balanced market, about 94-95 % on the homes sold on average are sold for the selling price.
In a balanced market, Novak said typically negotiations would ensue and both the buyer and seller make a compromise on pricing and everybody walks away happy. In a normal market, sellers are discounting their home’s asking price by about 5 %.
“We are still very far from that kind of market at the moment,” Novak said.
Home pricing remains strong. The median sales price of homes climbed almost 10 % in June 2022 over the same month last year. The median sales price was listed as $225,000 in June 2021 and $247,000 in June 2022, a 9.8 % climb. The year-to-date median home prices in 2022 is 16 % higher than the same period last year, rising from $200,000 to $232,000.
“What we haven’t seen is a decrease in pricing. There is still fierce competition. As some point that will happen. Prices will start to cool down,” Novak said.
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