Mornin', peeps!
So, the Indianapolis housing market statistics for May 2022 were just released and here's the splash:
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- The market STILL favors sellers, to the tune of 102.4% of ask received across MIBOR'S 16 county, 110-township service area.
- Median sales price STILL continues to rise, up a staggering 12% from this time last year.
- Price per square foot has STILL risen some 16.4% from May 2021 and is STILL climbing!
- Active inventory has STILL risen, almost 30% from a year ago.
But Miriam...haven't you heard the recent headlines?
You know, the ones that say interest rates are rising! Supply chain disruptions are causing chaos! Gas prices have doubled!! We're headed into a recession!
Surely this will cause the housing market to crash!
Here's my response:
Maybe...maybe not.
Last time we had a housing meltdown, it was primarily due to lax mortgage lending practices, i.e. If you could fog a mirror, you could get a mortgage.
Let's remember that was 15 years ago and a lot has changed. Lending regulations underwent a massive overhaul and the perspective of many has shifted.
These days, many buyers are conservative when it comes to buying, often paying cash outright for homes here in Indy, ponying up hefty down-payments or bridging any differences in apprsaial price with funds from their own savings.
We've lost some 10 years of construction--this, coupled with 24 months of a global pandemic and all that goes with it--has affected the buying and selling behavior of the general public.
I mean, it's hard to think about moving when you're busy sheltering in place.
Take another look at this chart:
I made some, uh, "edits" for you.
This is a straight-up scarcity issue, meaning there just aren't enough houses to go around. Incredibly, we get a front-row seat as we see the law of supply and demand at play. While the headlines that say there's a recession coming, it's not likely to cause the huge dips in values that we saw some 15 years ago.
How this will unfold is STILL anyone's guess.
I don't have all the answers, but scarcity is scarcity.
Until that issue is solved, this will continue to be a seller's market.
Have another perspective?
With gratitude,
Miriam
