In the central Indiana real estate market, 2016 made history. Sales records were smashed, and home values grew. Here in the spring of 2017, the market is shaping up to deliver more strong results.
Looking back, David Caveness, president of Carpenter Realtors, said, “The central Indiana housing market remained surprisingly strong. In fact, it was a record year despite extremely low inventory of homes on the market. We thought the market might not be as strong as it was because of the low inventory of homes to support, but we were wrong.”
Nearly 77,000 units were sold in 2016, besting 2015’s mark by more than 14 percent. Average home values rose throughout the region in 2016. The law of supply and demand was in full swing, with the low home inventory driving up prices. Appraisers worked overtime to affirm the values being presented in deals.
“Multiple offers drove up prices in 2016, which was great for sellers and frustrating for buyers,” said Amy Englert of Carpenter Realtors. “For some buyers, it was a war zone out there. You had to be there on day one when a home was listed, prepared to write an offer at full price or more and request no repairs.”
Recalling the hustle and bustle of last year’s market, Englert said police were called to some open houses to direct traffic so buyers could safely enter and leave. On some occasions, open houses were so packed with prospective buyers that hallways were clogged.
Through the excitement in 2016, Carpenter Realtors broke records, too. Carpenter continues to be the primary growth company in central Indiana, with 32 neighborhood offices in metropolitan Indianapolis, each one positioned to meet the needs of buyers and sellers. The company continues to serve as central Indiana’s real estate company of choice in 2017.
“Having been an integral part of the real estate market in Indianapolis for more than 50 years, Carpenter Realtors has seen a multitude of changing market conditions. We totally understand the market is cyclical and seasonal, with last year being a large growth season,” said Patrick Wilkins of Carpenter Realtors.
While 2017 is off to a fast start, expectations for the remainder of the year are tempered, largely due to the lack of inventory. MIBOR Realtor Association reports that central Indiana has three-month inventory of homes for sale. This means that with no additional homes listed, the current inventory would be sold within three months this spring, the busiest time of the year. A six-month inventory indicates a healthy, balanced market, and a nine-month inventory tips the scales toward a buyers’ market. How the home inventory expands or contracts this year will determine in part the market’s overall performance.
“The low inventory of homes, the slow rise of mortgage rates, increasing home values and a rise in the number of millennials entering the traditional housing market all show it should be another good year for residential real estate in central Indiana,” Caveness said. “We are forecasting the central Indiana market to be off by about 6 percent from 2016. However, so far this year, each month has seen sales figures higher than the same month last year, so we’re off to a hot start.”
Millennials — individuals born roughly between 1977 and 1995 — increasingly are buying homes, and their impact is being felt in central Indiana. Many are first-time buyers seeking completely updated, move-in-ready homes. This demand has led to a resurgence of new construction in already popular areas like Westfield and Noblesville.
“The pressure on the low inventory has a lot to do with the millennial market,” Englert said. “With many of them being first-time buyers, it is creating a feeding frenzy on the entry point of the housing market.”
The inventory growth or shrinkage will be the main influence on the central Indiana market. No matter how 2017 compares with the previous year when it’s all over, the signs point to another banner year, with buyers and sellers finding the homes of their dreams in Indianapolis.