Johnson County, South Indy Single-Family Housing Market Levels Out

By Aspire Economic Development + Chamber Alliance | | 2.28.23

In July of 2022, Aspire reported that median sales prices for single-family homes in Johnson County rose 17% according to MIBOR Realtor Association. In that same timeframe, new listings rose 1% with the percent of ask received (ratio of asking to selling price) up .08%. Days on the market declined 7.7%.

Updated data from MIBOR indicates that the median sold price of single-family homes in Johnson County as of January 2023 is up year-over-year 6.5% since January 2022. New listings have decreased since a short-term peak of 335 in June of last year, and the overall data states that new listings are down 15.2% in the new year also dating back to January 2022. Meanwhile, percent of ask received has seen a decrease of 3.2%, but days on market have increased by a significant 250% over the course of the year.

These are signs of a cooling local housing market in the winter of 2023 after a rather hot one last summer. Like the weather, fluctuations are to be expected and many of these cycles follow somewhat predictable patterns and trends. Some investors may see slowdowns in markets like this as cause for concern, but after a particularly energetic season in 2022, local housing experts seem to welcome a catch-up period and see the market as reaching stability, not recession.

“In comparison to last year, the market is still pretty strong,” said Tanya Smythe of Smythe & Co. Real Estate. “We are still seeing multiple offers on available properties especially in the lower price ranges. The number of listings on the market has leveled off, but there is still good demand even though we may not be getting as much as the last two years.”

MIBOR analysts have provided recent data from Perry and Franklin Townships in Marion County that show median sales prices decreasing from $290,000 in July of 2022 to $221,500 by January of 2023.

The MIBOR data of Franklin and Perry Townships also show that new listings in the area have shrunk 45% and closed sales have steadily decreased from 258 to 87 in July through January. Cumulative days on market have also increased from 6 days in July to 45 days in January.

The Federal Reserve’s decision to raise interest rates last year may seem like a highly technical and bureaucratic process far removed from our local lives, but the Fed has influenced the local single-family housing market by shifting consumer confidence.

“When money is cheap to borrow, everyone seemingly does it, or has the ability to. Consumer confidence is all the Fed is controlling,” said Joel Asbury, Operations Manager and Senior Mortgage Advisor at Approved Mortgage. “Their announcements tend to be baked into the market before they’re made official, so if the actual news is different, the result may not be what was desired initially. This is why rates more recently have been up and down.”

Rising interest rates on loans in general has just as much a psychological effect on buyers and sellers as they do financial. Smythe has noticed the behaviors of individuals in the market indicating that many people are still moving, however they are generally pausing before they consider a higher price range of properties.

“I think the interest rates may be slowing people’s decision-making down, but people are still moving,” said Smythe. “However, cash buyers are obviously not affected by interest rates, so they keep the world spinning too.”

Smythe optimistically views the market slow down as a less hectic opportunity for both current and prospective homeowners as well, allowing for more time to make these important financial and personal decisions.

Demand has not faltered. Local lenders such as Approved Mortgage are still seeing plenty of buying activity among a wide variety of people from around the community.

“Demographically speaking, the South Asian communities of India/Pakistan & Burma descent are a big pocket of community buyers these days. Generationally speaking, Millennials are the primary first-time buyer applicant, but that group is now aging beyond 40 years old and is still considered the largest market available to purchase a home,” said Asbury.

“Older generations are selling existing homes while Tract Builders continue to create inventory for young families primarily. Especially west of Averitt Road in Greenwood and between Honey Creek Road. Saddle Club in Bargersville is hopping as well.”

Industry analysts, buyers, and sellers all would greatly benefit from a functioning crystal ball. However, all one may need is a keen eye on market trends and a solid understanding of history.

“The rumors are that the Fed will raise their benchmark savings rate another quarter sometime between now and June but most likely in March. Then we won’t see much future action as they claim inflation is coming down right now,” said Asbury.

“They raised it a quarter at their meeting in late January which should put a quash on rising tides if they do what they say, and interest rates will react accordingly because the bond market will stabilize.”

Real estate is the foundation of a local economy. Any serious initiatives in economic and workforce development must address the issue of housing availability and affordability.

“Employees are the currency of business. Aspire’s workforce development efforts include attracting talent to our community,” said Christian Maslowski, Aspire President and CEO. “Robust economies like Johnson County and the Central Indiana area must continue to attract talented workers to sustain new business and GDP growth. A broad housing inventory, available to workers at all income levels, can spur potential workforce growth, causing our community to attract economic development opportunities.”