With fewer homes on the market, buyers might have to pay more; and new-home construction is expected to increase to fill the demand.
In Johnson County and
across central Indiana, home
sales are either slightly down or stable compared with last year.
But the price homes are selling for is up. And fewer homes are listed for sale.
Last month, the number of homes for sale in the county was down by 16 percent, and across central Indiana listings were down 8 percent, according to the Metropolitan Board of Indianapolis Realtors.
In 2006, about 2,600 homes were for sale on the southside, but now that number has been cut in half to about 1,300, said Pat Watkins, a real estate agent with Mike Watkins Real Estate.
And developers are hearing about a need for more new homes, but homebuilding is still slower than it has been in years past.
That can mean higher prices, Watkins said. Real estate agents Watkins knows have had the same commissions as last year but sold fewer houses overall, meaning prices are up.
The average sales price in Johnson County this year is
about $11,000 more than the average in 2013, according to Metropolitan Indianapolis Board of Realtors statistics.
Watkins’ advice to someone considering buying a home in the next three to five years: Do not wait or else you could pay an even higher price, he said.
Interest rates are as low as
4 percent. But if the rate rises to
7 percent, for example, a homeowner could pay as much as $40,000 to $60,000 more over the life of a loan, Watkins said.
And with a slowdown on new construction since the recession hit more than five years ago, few new homes are available. Combined with fewer homes on the market, prices will continue to go up for the remaining homes available, Watkins said.
Multiple factors contribute
to fewer homes being on the market. Corporations have purchased hundreds of homes
in the past three years in
newer subdivisions to be used as rental homes. Also, not as many people are facing foreclosure, so cheaper homes are not as easy to find, said Trent Newport of CrossRoads Engineers.
That means new construction will be what many homeowners turn to next, Newport said.
“What we hear on the street
is that there’s a need for
developments with new housing,” he said. “There’s a shortage in that market.”
Almost 600 building permits were issued in Johnson County in the first 11 months of 2014, up from about 550 at that point last year — an increase of about
9 percent, according to the Builders Association of Greater Indianapolis. The number of building permits issued in central Indiana is slated to reach 5,000 total this year for the first time since 2007.
Johnson County is attractive to buyers because of the affordability of homes and the proximity to jobs, according to Christi Coffey of F.C. Tucker.
Homes are being built, such as in the Heritage and Homecoming at University Park subdivisions, and custom-built homes have been on the rise this year.
But part of the need still isn’t being met, Watkins said. Typically, the homes being built now are two stories for larger families. Instead, what is needed is smaller homes for families that downsize after their children move out on their own, he said.
Residents who are downsizing from a larger home to a home
for empty nesters is a trend
that he is seeing, so more ranch-style homes could be built in Johnson County in the future, Watkins said. He added he hears from two or three families per month looking to downsize or move out of the state to be closer to their grandchildren.
Residents downsizing will be a trend that will continue for a number of years as the baby-boom generation continues to age and retire, Watkins said.
Average sales price in Johnson County (through November)
Increase: 7 percent
Homes sold in Johnson County (through November)
Decrease: 1.5 percent
SOURCE: Metropolitan Indianapolis Board of Realtors
Number of building permits issued through November in Johnson County
SOURCE: Builders Association of Greater Indianapolis