Taken from Inside Indiana Business with Gerry Dick - Interview with Austin Stagman from Bedel Financial Consulting
The recent COVID-19 pandemic has affected all aspects of the economy. Most of this impact can be seen on the news through stories about unemployment numbers, GDP estimates, and stock market volatility. But what impact has the pandemic had on residential real estate?
If we look at the numbers, are fewer homes being sold? Are prices declining? Some of the results might surprise you. Let's get an update on the figures, both across the U.S. and closer to home in the Hoosier State, focusing on one popular housing metric: existing-home sales.
Closer to Home – Indiana Market is Better!
The trend for existing-home sales in Indiana has largely tracked that of the U.S. overall, though the performance has been superior. The most recent data released in April 2020 shows existing-home sales declined -10.4% month-over-month, versus -17.8% for the U.S. Further, we have seen a -11.9% drop in sales in April 2020 from one year ago versus -17.2% for the U.S over the same time frame.
Median home price growth in the Hoosier state is also outpacing the median U.S. numbers. The Indiana median existing-home price in April was up 9.1% from a year prior. Just like the U.S. figures, median home prices have also steadily increased since pre-pandemic. February's median price was $168,000, followed by $176,000 in March, and $180,000 in April.
The current Indiana residential real estate market is summed up well by Bernice Helman, 2020 President of the Indiana Association of REALTORS, when she says, "We knew sales would wane in April due to the stay-at-home recommendations and we expect that to continue for the next couple months with fewer sellers listing homes." She continues, "Prices have held firm given the competition spurred by low inventory and the purchasing power created by low-interest rates."
While the number of existing-homes sold are clearly being impacted by the pandemic, the median price is actually getting a boost from the even lower mortgage rates. Whether this trend continues is yet to be known as the May results are expected to be released on June 22.