Home sales and construction on rise in Northwest Indiana
By Christin Nance Lazerus email@example.com September 3, 2013 6:08PM
Homes are under construction at The Regency subdivision in Crown Point, one of the busiest communities for new home construction. | Christin Nance Lazerus/Sun-Times Media
Updated: October 5, 2013 6:08AM
Sales of existing homes and new home construction are on the rise as the Northwest Indiana housing market continues to show strong signs of recovery.
In July, sales of single-family homes in Northwest Indiana increased by 23.2 percent as compared to the same month in 2012, according to data provided by the Greater Northwest Indiana Association of Realtors. The data covers five counties — Lake, Porter, LaPorte, Jasper and Newton — where 919 homes were sold in July, compared to 746 in July 2012.
Pete Novak, CEO of the Greater Northwest Indiana Realtor group, said that marks 25 straight months with an increase in home sales.
“We thought that it would slow due to tracking appointments and interest rates going up, but that wasn’t the case,” Novak said.
Mortgage interest rates were at 3.5 percent for a long time during the downturn in the housing market, but the rate has increased to about 4.5 percent in the past few months.
The inventory of houses available and the number of days houses spend on the market are both decreasing.
“Demand seems to be outpacing supply,” Novak said. “We’ve not seen a spike of sellers going into the market, but what has obviously increased is the number of people buying and competing for houses.”
Prices are starting to make a comeback as well as the median selling price increased 0.7 percent to $138,000. Novak said foreclosures and short sales have kept home prices low, but recent data by CoreLogic showed foreclosures decreased by 25,000 in July compared to the same month in 2012.
“Home prices have been relatively flat for quite a while,” Novak said. “I see a lot of markets nationwide with price gains, but we don’t seem to follow the pattern nationally.”
A batch of new homes are under construction locally as well, with St. John and Crown Point seeing most of the activity. The communities ranked fourth and fifth, respectively, in the MetroStudy Chicagoland Second Quarter 2013 Executive Summary.
Chris Huecksteadt, MetroStudy’s Midwest director, said the Lake County’s new developments are markedly different than some in Illinois.
“We’ve found in other markets that there will be one builder constructing a couple hundred homes, while in St. John and Crown Point you have multiple developers doing 15 to 25 homes. It’s more diversified,” Huecksteadt said.
Through June 30, St. John had 202 new housing starts with 154 closings, while Crown Point had 198 new housing starts with 184 closings.
While the new construction is promising, Huecksteadt said it’s a far cry from the boom in the early-mid 2000s, when Lake County had 2,500 new housing starts.
“It’s on pace for 750 this year,” Huecksteadt said. “A big reason is we lack strong job growth. The markets that remake faster tend to create a lot of jobs, such as Texas. There’s demand for housing so the market fixes quickly. It’s been a much slower process in the Midwest.”