BY KEITH BENMAN, Times of Northwest Indiana
kbenman@nwitimes.com
Home prices in Northwest Indiana are not dropping as dramatically as in some parts of the country, but the region has suffered a drop in the number of homes sold, region Realtors say.
Even so, Realtors are quick to point out that someone with good credit and some cash can find an excellent buy considering the drop in prices and low interest rates. Likewise, those selling homes are not seeing prices drop as dramatically as elsewhere.
"For the same reasons we didn't get crazy prices when the boom happened, we're not getting crazy drops like some parts of the country," said Pete Novak, chief executive officer of the Greater Northwest Indiana Association of Realtors.
The median sales price of an existing single-family home dropped 6.4 percent in the fourth quarter of 2008 in Northwest Indiana as compared to the same quarter one year before, association figures show.
That compares to an 18.2 percent drop in home prices nationwide, according to the Standard & Poor's/Case-Schiller home price index. That was the largest drop in the index's 21-year history.
However, when it came to number of homes sold, the drop in Northwest Indiana was steeper than the national average.
In 2008, 6,965 existing single-family homes were sold in Northwest Indiana, which represents a 22.2 percent drop from the 2007 figure of 8,956 homes sold.
January was a particularly harsh month for home sales here with just 274 single-family homes sold as compared to 412 in January 2007. That's a drop of 33.5 percent.
Nationally, home sales dropped 13.1 percent in 2007 and 7.1 percent in January, according to the National Association of Realtors.
Novak said if someone has some cash and good credit, there probably has never been a better time to buy a home.
Interest rates are at historic lows of close to 5 percent for 30-year fixed-rate mortgages, according to federal mortgage giant Freddie Mac. In addition, an $8,000 tax credit for first-time home buyers is part of President Barack Obama's stimulus package recently passed by Congress.
Those factors already are driving an increase in sales in Porter County, according to Minakshi Ghuman, a Realtor with Century 21 Estates in Valparaiso.
"I think there is just a more positive outlook for everyone, plus those (interest) rates have a lot to do with it," Ghuman said.
But the biggest attraction may be price, with buyers in the driver's seat when it comes to bargaining with sellers, Novak said.
"The buyer has the leverage at the moment," Novak said.
Locally, one has to go neighborhood by neighborhood to get a true picture of home prices, Novak said. That's because the foreclosure crisis is affecting some areas much more than others.
Much of the drop in home prices now is being driven by foreclosures and short-sales, Novak said.
Homes are foreclosed by banks for nonpayment of mortgages, and the homes often can be bought at below-market value.