Housing Demand in Johnson County, South Indy Remains Steady

By Aspire Economic Development + Chamber Alliance | | 7.19.22

While mortgage rates creep up nationwide, local housing professionals agree demand remains steady. In Johnson County comparing June 2022 from the year-ago level, the median sales price for single-family homes rose 17%, according to the MIBOR Central Indiana Realtors Association. Also during that period, new listings rose 1% and the percent of ask received (ratio of asking to selling price) was up .08%. Days on the market declined 7.7%.

“The market is still very good right now, even though interest rates have gone up,” said Tanya Smith of Smythe & Co. Real Estate in Franklin. “If people want to sell, they will sell anyway perhaps because of a life transition. There’s a strong buyer pool out there.”

Smythe, who sells homes throughout Johnson County, added, “The interest rate hike has been recent, so banks are just now coming out with new programs that reflect it. We will see more creative ways to finance mortgages. We haven’t had to think about interest rates in past years.”

“We’re in a wonderful market right now with so many buyers,” Smythe noted. “Some buyers are hesitant to spend as much as in the past, but they do want to buy a home. It’s still a strong market and higher interest rates won’t prevent people from buying. It will depend on their financial status.”

Meanwhile, statistics for the market in South Indy – Franklin and Perry townships – tell a slightly different story. Comparing June 2022 from the year-ago level, the median sales price rose 19.6 %, similarly as in Johnson County. But new listings in South Indy rose 9.1 % and average days on market rose 50%, according to MIBOR. The percent of ask received was down 0.7%.

The Johnson County/South Indy market is one of those served by Lake City Bank. Vice President and Home Lending Manager Scott Bucher was asked why mortgage rates have increased: “The short answer is mortgage rates are up because bond yields are up. The 10-year T-bill (which is considered by many to be the best indicator of mortgage rates) was 1.58% on Jan. 1, 2022. As of July 12, the current 10-year T-bill rate is 3.06%, which represents an increase of roughly 148 basis points year-to-date. This aligns with how mortgage rates have acted YTD in 2022.”

“The belief of many industry experts is that if the Fed continues to raise rates aggressively to fight inflation, mortgage rates will follow along,” Bucher said.

He added, “Rising rates have dried up most refinance activity. We continue to see steady purchase demand and stable home values due to low inventory levels. We’re experiencing many applicants who are ready to purchase (despite increasing rates) but who are unable to find suitable and affordable housing options. New construction demands remains steady despite rising construction costs.”

Also serving the South Indy market, among others, is Berkshire Hathaway Home Services Indiana Realty. “Prices are still rising. Inventory is sitting on the market longer. But it’s still a seller’s market,” observed Dean Hicks, principal broker-owner. “In my opinion, home sales will continue to remain flat because of the uncertainty in the economy.”

Hicks noted, “People still need to buy and sell homes. People have babies, move into assisted living, and so forth. We have to get used to higher interest rates. Maybe they will level off a bit next year.”

And he advised: “Sellers need to enlist the services of a full-time Realtor so they can get the most money they can in a turbulent market. There are many huge investment buyers taking advantage of people, so homeowners need representation.”

How does the housing situation affect Aspire members? “As local residents and homeowners, the state of the housing market impacts business leaders personally with respect to their home values and ability to sell or buy,” explained Aspire President and CEO Christian Maslowski. “And as local employers, this is of interest because it helps business leaders understand the housing market for their employees. Local housing factors into local hiring and retention of employees.”

Likewise, the housing situation affects the community at large, Maslowski noted. “There were recently too many buyers for too few homes, thus creating obstacles for people wanting to move into a new community, or families wanting to move up into a larger home. This matters because we need to grow the pool of local workforce talent.”

“Attracting talent to our community is more vital than ever,” observed Maslowski. “As residents and employers, it is important we understand how the national and regional housing narrative plays out locally. Housing and quality of life are primary determinants in residential location, even above jobs in many cases.”

Maslowski added that Aspire is seeking funding to run a Johnson County housing study to help community leaders, planners and builders understand demand at various price points and within various pockets of the county.