Buying a house is now a more competitive sport than anything broadcast during the recent Olympics.
Homes are garnering multiple officers almost immediately, leaving sellers to sort through the minutiae of the bids as prices continue to rise, according to local real estate agents.
“I’m assuming it’s like this all over the country right now but if we put a house on the market at the right price point, we’ll get multiple offers and it will sell at higher than the asking price,” said Paul Boyter, branch manager for the Chesterton office of McColly Real Estate, as well as the Great Lakes and LaPorte offices.
“We had one that was $67,000 over the asking price,” he added.
The median selling price of a home in Porter County went from $217,000 in June 2020 to $265,000 one year later, a jump of 22.1%, according to figures from the Greater Northwest Indiana Association of REALTORS, which tracks housing sales each month for Lake, Porter, LaPorte, Jasper, Newton, Starke and Pulaski counties.
Boyter has been a real estate agent for 31 years and never seen anything like this here before, though he’s heard about it on the East and West coasts. The tight demand and resulting price spikes really kicked in around April and May of last year, right after the start of the COVID-19 pandemic, he added.
A four- to six-month supply of homes on the market is considered a pretty good balance.
“Right now it’s probably a 30-day supply. There’s just not enough homes on the market,” he said.
Mary Kaczka, a real estate agent with RE/MAX Lifestyles in Valparaiso, is seeing the same thing.
“What we’re seeing is a very low supply of homes for sale. We track that statistic and it’s just really low. People on the buying side, it’s making things very difficult for them,” she said. “These houses go on the market and it’s such a feeding frenzy.”
A house that goes on the market can generate 10 or 15 viewings and four or five offers almost immediately, she added.
“The curious question there is why isn’t the supply there,” Kaczka said, adding the housing industry has been under-building.
Multiple factors are playing into the market. Fewer homes were built in 2008 and the following few years because of the recession, Boyter said, but the population in this area has continued to grow. Low interest rates for mortgages, low unemployment rates and high wages are all playing into the housing market.
“It’s kind of a trifecta there,” he said.
The changing market also is reflected in the homes for sale. In the Duneland area, 76 homes are for sale and nine are $200,000 or less, Boyter said, “which is kind of crazy. Three years ago, there would probably be 40 under $200,000.”
Exacerbating the situation is that the price of building materials has skyrocketed, increasing the cost of building new homes, he said, and increased demand for rentals is driving rents up as well.
“You can sell your house for a really good price, but you have to go somewhere,” Kaczka said.
Boyter thinks the tight market could go into next year unless mortgage interest rates go up. They have been hovering around 3%.
“I think it’s hard to predict what will happen, but things have a history of going up and down,” Kaczka said.
The good news for homeowners is that increasing assessed valuation isn’t driving property tax rates up and should drive them down, said Porter County Assessor Jon Snyder.
The area is continuing to see accelerated prices and a lack of demand, Snyder said, adding he expects that trend to continue.
Assessed valuation went up throughout Duneland by 5% to 10%, though the assessor’s office had a record low number of appeals this year.
“If the assessed value continues to rise, the tax rate should go down. Tax caps, circuit breakers, whatever you want to call them are going to protect taxpayers from paying more than 1%,” he said, adding the exception is tax rates for school referendums, which are not included in the tax caps.