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Greater Indianapolis Real Estate Market Update- First homes and move ups needed!

Greater Indianapolis Real Estate Market Update

I want to open this article by mentioning that after 8 years of market suppression stemming from the housing collapse of 2008, the quarter covering May June July for 2015 was the strongest quarter in a decade for housing sales. Even with that, housing sales for the same quarter this year were 7.8% higher than 2015. At the same time, while people are starting to list their homes as a result of these increased sales, the pace is not keeping up.

The result of this continued trend is that the total inventory of available homes for sale in the Indianapolis area is down by 11.7% for the same time last year, and down by 19.7 percent for the last two years. As of the end of July, 2016 there are only 11,377 houses for sale in the MIBOR area.

The logical conclusion is that home prices in the area will continue to go up, and the length of time it takes to sell a home will go down.

Now that I have gotten that tidbit out of the way, I would like to look a little deeper at what is happening in this housing market. While the market was suppressed for 8 years, there were not a lot of first time home buyers going out and purchasing their first home. As a result, the previous group of first time home buyers was not selling and buying their first move up homes. This is reflected in the numbers.

housing trends by price

Full report at MIBOR

As you can see, the price range most associated with first time home buyers, $75,000 – $120,000 has an inventory deficit of over 35% from the previous year, and the move up rages of $120-$175,000 and $175-$200,000 have a deficit of 11.6% and 59.5% respectively.

The lack of first homes and first move up homes on market makes sense given our recovering economy. Buying pressure was pent up for almost 10 years, while half of a generation waited to be in a financial position to buy their first homes, and the previous generation was equally stalled because they need to be able to sell their first homes in order to move up. At the same time new home construction is still slow as the builders struggle to get back up to speed in order to catch up with the market. All of that has come to a head, and now the buyers are back and inventory is lagging behind.

The interesting thing here is the relative abundance of 2nd move up homes and even luxury homes. There are two possible ways this dichotomy will play out. Some of the first move up buyers may stretch their incomes to go ahead and move into second move up homes instead of first move up homes, OR market pressure will cause some of those 2nd move up homes to lower their prices into the first move up price range. Either will bring more balance to those segments of the market. Given the strong buying pressure this market is still experiencing, I would posit that it will be more of the former and less of the latter, but it will likely be a combination of the two.

So what does all this mean to home buyers and sellers? Well if you are buying a first home or a first move up, you have to be positioned to move quick when the home you want comes on market. You will need to make strong offers. You will definitely want to use a Realtor who has strong follow up and communications skills, so you don’t miss any deal that becomes available.

If you are a buyer and looking at second move ups or luxury homes, you have a little more bargaining power. Their are more homes available in this range (relatively) so you can look a little longer and negotiate a little harder, and still not likely lose the house.

If you are looking to sell a first home or first move up home, this is your market! Call me right now and get your home listed. There has seldom been such a great opportunity to sell a first home or move up.

If you have a second move up or luxury home you want to sell, the market is still strong. However, you will want to make sure your home is staged to the nines and you should go into the process realizing that there will likely be some concessions in getting your home sold.

Thanks for taking the time to read my article. If you would like to work with a Realtor who studies the market and really knows how to position you in it for a successful real estate transaction, call me at 317-657-8059 orĀ email robb@yourrealtylink.com to set a buyers or sellers consultation.

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