If you’re looking to buy a house in Howard County, good luck finding one.
Over the last month, the number of residential homes up for sale hit an all-time low, with just 56 properties currently listed in Kokomo and all of Howard County.
That’s a 75% decrease in the local housing inventory since December 2019, when 227 homes were listed. At the time, local real estate agents considered that to be a tight market.
The housing desert now facing the county is the culmination of a years-long trend of the state’s inventory drying up. The number of homes for sale statewide has gradually declined every year since 2007.
But throw in a global pandemic, and historically low mortgage rates, and the amount of homes has plummeted faster than anyone ever expected, said Amy Pate, executive vice president of the Realtors Association of Central Indiana.
“It’s a totally crazy number,” she said.
Pate said although the market has been shrinking for some time, a slew of factors brought on by the pandemic have contributed to an exponential drop in available properties.
First, an eviction moratorium on homes with certain federally backed mortgages prevented many houses from being listed that in a normal year would have become available to buy. That moratorium expired on Sunday.
“There’s been this repression of houses going through the foreclosure process, so we’re not seeing hardly any hitting the market,” Pate said.
She said many people are also choosing to stay in place during the pandemic, especially baby boomers, most of whom are in their 60s. Those who might have considered selling have now put their plans on hold.
“Boomers tend to stay in place longer, and especially with COVID, they’re absolutely not thinking about moving unless they have to,” Pate said.
And houses that do go to market are snapped up immediately, often times by millennials looking to buy their first home while mortgage rates remain low.
Add it all up, and you get a historically low housing inventory the likes of which local real estate professionals have never seen before, Pate said.
“It’s kind of crazy,” she said. “It’s kind of a perfect storm of these factors coming together.”
Now, the tight inventory is drastically driving up home prices, which have made it one of the best markets for sellers in recent memory, said Cassie Salinas, an agent with the Wyman Group who has worked in the local market for 14 years.
“Right now, I can definitively say it’s a seller’s market,” she said. “There’s no question.”
In just the last year, the median sale price in Howard County has increased by nearly 9% as demand for housing far outpaces the supply. The number of sellers receiving their asking price sat at over 97%, according to data from the Indiana Association of Realtors.
Salinas said if a house is priced right, there’s also a very good chance it could bring in much more than the asking price. Just last month, she said, a homeowner asking $117,500 ended up selling for $125,000.
“It’s putting a lot of pressure on pricing,” Salinas said. “Buyers are really willing to pay more than what they typically would because the demand is so high.”
It’s also changed the entire process of how people typically buy and sell homes. Salinas said in the past, a buyer would tour a home, take a day or two to sleep on it, and then put in an offer.
“Now, there’s no sleeping on it,” she said. “If you’re not writing the offer immediately, it’s gone.”
Sellers also in the past would have a day or two to sit on an offer. Now, Realtors are giving them just a few hours to make a decision.
But with a COVID vaccine giving light at the end of the pandemic tunnel, real estate professionals are hopeful the tight housing market may loosen up later this year, Pate said.
“Having the vaccine on the horizon is huge,” she said. “For boomers who put off moving and were thinking about it a year ago, they’re probably now even more motivated. As things loosen up, hopefully we’ll see that turn around a little bit.”
Salinas agreed. She said in reality, it would only take a handful of homeowners to put their property up for sale to provide a needed boost to the local housing market.
“It just takes five or 10 sellers to put their home on the market, then all of a sudden you have another five or 10 buyers who are selling their homes,” she said. “It’s a cycle, but somebody has to pull the trigger to get it going.”
But until that happens, buyers will have a hard time finding a house in Howard County unless they’re willing to pay good money for it.
“It’s frustrating for buyers,” Salinas said. “They’re writing offers on three or four homes sometimes before they get one. It’s challenging.”
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