It’s Counterintuitive but the Real Estate Market Is Hot Here
We checked in with a couple of our local real estate experts in the Carmel and Zionsville markets, expecting to hear grim tales about the current state of the local real estate market or, at the very least, less than stellar numbers as compared to the year prior.
Instead, Joe Kempler with the Kempler and Pollard Group at WestClay Realty and Robbin Edwards with Edwards Realty Group at F.C. Tucker Company, Inc., shared what their year has been like amid the pandemic and the accompanying economic roller coaster ride that has impacted all of the nation’s industries in a variety of ways.
Inventory Is Still Low and Continues to Drive Up Demand and Listing Prices
When we last checked in with our real estate experts in early spring, the buzz on the streets was that it was a strong seller’s market, and the inventory in both communities was LOW. So, what is the status for sellers and prospective buyers now?
Compiling her data for the Zionsville real estate market from August of 2019 to August of 2020, Edwards shared, “With regard to median price, homes that are currently for sale, the median price is up 18.2% from last year, and for homes that are under contract, the median price is up 23.1%. We are seeing homes sell at 98% or higher of list price. Zionsville has been consistently strong in this area, so we aren’t up much from last year, but this shows confidence and consistency in the market.”
Not a cause for concern, Edwards also shared that listings in Zionsville are actually down 28% from last year, illustrating that inventory is low, pushing both demand and price up.
“Even though listings are down, closed sales are up 22.4%, so people are buying and homes are selling,” Edwards explained. “I want to caution people that as they read these statistics to realize that there are several factors that go into listing a home and getting quick and strong offers. I wouldn’t want to misguide anyone and give them a false sense of their home’s value in the market. While inventory is low, buyers are more discerning about what they want, and they are willing to wait. In addition, buyers have more information at their disposal than ever before, so they are fairly educated about the market and pricing going into transactions.”
How Does the Fed’s Recent Decision Play Into This Pandemic Market?
At the onset of the pandemic, Kempler shared that while the real estate market was strong, he anticipated that people would shy away from making new investments, such as purchasing a new home.
“I would’ve thought that people would have been more withdrawn and that the stock markets would have plunged—which they did for a period of time—but now I think that the Feds have helped [the real estate market] quite a bit by keeping the interest rates lower than they’ve ever been,” Kempler said. “Ordinarily, I would have thought that after a run like that one we’ve had with low interest rates, they [rates] would be upwards of 6–7%. The lower-than-usual rates have allowed people to buy much more than they ever could have before.”
Another contributing factor to the current lack of inventory is the fact that a lot of homeowners have suddenly had to share their space with their loved ones for extended periods of time throughout the pandemic and have had to work and/or study from home, utilizing the spaces in their homes they once considered to be unutilized square footage. And so they aren’t in a hurry to sell and downsize their living space. On the flip side, some people are needing more living space and have been actively buying.
“Obviously, the interest rates are a key factor to what’s going on in the market, along with the fact that the pandemic has forced people to work from home, their kids and college-age kids are home more and everybody has been needing more individual space. That has been another driving factor for people to be moving because they suddenly have needed more space.”
Both Edwards and Kempler mentioned that both communities have seen a rise in people relocating from big cities such as Chicago and that has also impacted the demand in both communities.
Kempler concluded, “As of right now, this year is projected to be my personal best in my 15 years in real estate in terms of closed sales. And I have another three months. I would’ve never thought that would be possible at the beginning of this COVID-19 situation. And I think that it’s going to be a fairly good market in the months to come when we would typically be tapering off right about now, and the fact is, we’re not.”
To contact Robin Edwards with the Edwards Realty Group at F.C. Tucker Company, Inc., email her at [email protected] or via phone at (317) 508-1806.
To contact Joe Kempler with the Kempler and Pollard Group at WestClay Realty, visit westclayrealtors.com or via phone at (317) 523-6405.