So how’s the market doing? We’re about eight month in on Coronavirus and the changes it brought. It was probably around six months ago many of us in the industry weren’t sure what was going to happen. All of us on the edge of our seats. Will this crush the housing market? What will happen to home values? What about interest rates?
Todd Ferris, our fearless leader, remained optimistic. His predictions were that we would see the usual spring push occur later in the year. That rather than seeing the usual Spring rush to buy and sell a home, we’d see it unfold throughout the year. I’m happy to report that his inklings were on par.
These numbers are crazy - crazy optimistic. They have been each month I put the graphic together for our team! Given the circumstances of 2020 the data I’ve been most interested in comparing this year’s data to last year’s. Since at least March we’ve seen a steady increase in median sale prices. This time last year we saw a median sale price of around $190,000. As of September the median sale price is up to $225,0001. That’s an 18.5% jump! In the three years prior we only saw an average jump of 6.8%2. We typically see a two-digit jump over the course of two years. So what is driving this?
Well, we all know the basic tenets of ‘supply and demand’... Demand is high here in central Indiana because our supply is low. Where is this coming from?
Millennials are entering the housing market - previously comfortable with renting, they’ve decided they’re ready to buy3.
In recent years we've had an increase in the median number of years homeowners “stay put” - previously the average was around 7 years, now it’s closer to 10 years homeowners will stay before making a move4.
Central Indiana, over the course of recent years, has seen great economic growth thanks to companies like SalesForce deciding to call Indianapolis ‘home’5.
More buyers means increased demand and therefore tighter inventory as a result, but homeowners staying put longer doesn’t help the inventory shortage.
So will this continue? Will we continue to see nearly 100% list to sale price averages? Days on market that are less than 35 days? A rise in median sale prices?
To be honest with you - no. Eventually things will cool off and balance out. Just like everything in life we will continue to see ebbs and flows. When will this cool off happen? I have no idea!! 2020 has been fascinating in more ways than one. It’s an election year - during the last election cycle in 2016 we saw much calmer data6. But we’re also dealing with the Pandemic and its aftermath.
Now, do I think we’ll see a major drop off after the election and after the new year? No. If we do see a change in momentum I believe it’ll be a slow change, a healthy change back to a balanced market. But I don’t believe the sky will fall and the trajectory we have seen will drastically drop.
Why do I think that?
(And here’s where I’ll take that honesty a step further so bear with me) Life goes on, life is always moving forward. I know it seemed like the world stopped for a minute back in the spring, and in some respects it did, but people have lives. I believe we are stronger than we’re given credit for! Yes, there’s a major health crisis occurring; yes, there is an extremely important election on the horizon… But we’ve got things to do. We have a life to live. A lease is up, a small family finds out they’re expecting, a job change, you name it. As much as some naysayers want our lives to completely go on pause, it aint gonna happen! We are strong, resilient, focused, and the show must go on. At least that is what I’ve seen this year in the clients I’ve had the honor to represent.
And not to mention that Indianapolis and surrounding communities will continue to be a great place to live. Period. We’re centrally located, our airport connects you to virtually anywhere, we have great tourism attractions, an excellent food and brewery scene, and last but not least our amazing Hoosier Hospitality. So keep that chin up, keep moving forward, and keep this in mind when the trends do start to change. And if we find out I’m wrong, I’ll admit it.
In the spirit of full disclosure, I am an FPG agent and our Social Media Coordinator. I grew up in Northern Indiana and am a proud Indiana University Alumni (Hoo-Hoo-Hoo-Hoosiers!). I’m a boy mom for life and constantly chasing messes (when I’m not breaking up fights!) and truly love serving my community by way of real estate. I get to meet and help so many amazing people around town! It has been an awesome career. Now as the brokerage’s Social Media Coordinator, I get to brag about how awesome our city and people are. Win win.
My husband and I were referred to FPG when we returned home to Indiana. I was drawn to their way of doing business and when I was offered an opportunity to join them the choice was easy! If you’re thinking of a career in real estate, or one with Ferris Property Group, we’d love to talk.