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Residential real estate around the state; an update for Evansville, Fort Wayne, Indianapolis, Lafayette, Northwest Indiana and South Bend.

Residential Real Estate Around the State

EVANSVILLE

There may be talk of recession elsewhere, but the talk in Evansville is of a great selling year.

"The Evansville economy doesn't seem to be in bad condition at all," says Rich Klein, president of the Evansville Board of Realtors and residential sales manager for Citizens Realty and Insurance Inc., one of Evansville's largest brokers.

Brokers note that Evansville's image as a conservative area is a benefit. The major banks have a reputation of shying away from risky loans. "There's something to be said for stability," notes Klein.

But Evansville's strongest selling point is its cost of housing relative to income, according to the most recent housing-affordability report from the Indiana Association of Realtors and the Indiana University Center for Real Estate Studies.

"There are a lot of people out there with good incomes that need the tax write-off and this is one of the last write-offs remaining," says Wayne Kirsch, owner of Century 21-Solid Gold Realty.

The area has seen a boom in construction of homes in the $200,000-plus price range over the last five years, mainly because of the influx of Bristol-Myers Squibb Corp. executives who transferred to Evansville from the East as part of a corporate restructuring.

The average selling price in the local market has been creeping up. According to Klein, the average listing price in Evansville in 1990 was $76,500, and sellers were getting more than 95 percent of asking price.

The news is not so good for condominium developments in Evansville, however. That market is depressingly flat. "I wish I knew the answer as to why the Evansville market is so soft on condos," Klein says. "I guess it's part of our conservative nature. We want a backyard and a place for the dog to run."

FORT WAYNE

A pattern of steady sales in Fort Wayne was disrupted in 1990.

Home sales dropped 4 percent to 5 percent, and dollar volume declined as well. Those who were buying were purchasing modest-priced housing, while the high-end market sagged. "We definitely have an oversupply over $200,000," says Jerry McDermott, a principal in Premier Realtors. "That market has been slow all year."

Preliminary figures from the Fort Wayne Board of Realtors put 1990 sales in the neighborhood of 4,100 after a three-year string between 4,400 and 4,500. But the residential real-estate industry remained optimistic because the same steadiness that has become the trademark of the local market has provided insulation against the turbulence seen in New England and the West Coast.

"There are some areas of the country that are really in trouble," says Jack McCombs, a partner in Associated Brokers and president of the Fort Wayne Board of Realtors last year. "By the end of 1991, I think we'll see a better year in Fort Wayne than we had in 1990 and not too many of us are upset with what we had in 1990."

"We feel there's a pent-up demand that's been created over the last two quarters," says David Gall, current president of the Fort Wayne Board of Realtors and a partner in Rousseau, Phillips & Gall Realtors.

Homes in the Fort Wayne area remain affordable, according to the IU Center for Real Estate Studies.

"The market under $100,000 has been, I think, fairly steady. There's probably not as big an inventory in the $100,000 to $150,000 range. That price range might be a little tight."

It was sales in the under-$100,000 market that resulted in a median price of around $62,500. "That market was relatively strong compared with the low $100,000s, which was not strong at all," McCombs says.

"It's still a buyer's market," says McDermott. "The rates are as low as they've been in a long time. The conditions are right for things to be busy this spring."

INDIANAPOLIS

While the value of residential real estate soared on the coasts in the middle and late 1980s, the Indianapolis market chugged along at a moderate pace. Now, what was soaring is souring in much of the country, and Indianapolis keeps chugging along. "Our market at present isn't in anything like what we would call a recession," notes an upbeat Norman E. McClain of RE/Max Preferred Realtors in Greenwood, just south of Indianapolis. McClain served as president of the Metropolitan Indianapolis Board of Realtors in 1990. "Properly priced properties are still moving really well. The total units sold in 1990 was virtually the same as in 1989."

"Our outlook is positive," agrees Thomas S. Osborne, president and CEO of A.H.M. Graves Co. Inc. in Indianapolis. "The economy is stable, appreciation is relatively constant at about 4 percent, interest rates are single-digit. It sounds like a very healthy market to me."

What the Indianapolis area continues to have is affordable housing. US Housing Markets ranks Indianapolis as the country's eighth-most affordable market.

The median home in Indianapolis and its surrounding counties sold for $74,000 in the third quarter of 1990. That's up $1,000 from the second quarter and up from $69,950 in the third quarter of 1989. The cost of housing within the metropolitan area varied considerably: The median home was $107,000 in Hamilton County, while Shelby County's median was less than half of that, at $52,800.

The Metropolitan Indianapolis Board of Realtors found that homes stayed on the market an average of 86 days in 1990 before they were sold, less than a week longer than the average from 1989. Sellers weren't forced to give much on price: The average sale price was 95.6 percent of the listing price.

The economic health of the area hasn't gone unnoticed, adds H. James Litten, president of the residential real-estate services division of F.C. Tucker Co. "It seemed like there were hardly two or three weeks that went by last year when there wasn't some national publication picking up on the health of the Indianapolis market," he says, pointing to articles in USA Today and the Kiplinger Letter in September and Newsweek in October. "We just seem to be on a roll here."

LAFAYETTE

Greater Lafayette frequently touts its diverse industrial base and high employment rate as insulation from deep economic slumps.

"It's a stable market," reports Robert Sexton, president of the 430-member Lafayette Board of Realtors. "I saw what it was like in the 1980s when the interest rate was 17 percent, and we're just not feeling those kinds of effects." The safety nets, Sexton says, are recession hedges built into the community: affordability of housing in relation to incomes; a cross section of business and industry; and stable employment, particularly at Purdue University, the area's largest employer.

"Right now, real estate is both a buyer's and a seller's market, depending on the price," Sexton reports. "We have a shortage of homes under $65,000. And the market is probably oversupplied a little bit in the $150,000-plus range."

For the first three quarters of 1990, the area's sales were about 5 percent ahead of 1989. The third-quarter median home price was $70,250, up $11,250 from third-quarter 1989, according to the IU Center for Real Estate Studies.

Charlie Shook of the Shook Agency echoes Sexton's outlook. "The residential climate feels as good as it has in recent winters. Properties are being shown. Deals are coming together. The interest rates are very good, and there's an adequate supply of houses in most ranges, although there's a more abundant level of higher-priced homes."

New construction has been up since Subaru-Isuzu Automotive Inc. announced its plans in 1986 to locate in Lafayette; 1990 was up about 14 percent over 1989. Sexton attributes much of that growth to a death of available upscale homes in the resale market, which now has been alleviated.

Demand for subdivision requests flooded Tippecanoe County's Area Plan Commission during the past few years, but activity has slowed. Fewer requests to begin the approval process came in during the last half of 1990.

Nevertheless, Sexton calls the area's residential market a "bright spot." But knowing how much is unpredictable today, he says, forecasting 1991 business "is a toughie."

NORTHWEST INDIANA

John Lantz says he's not expecting to be quite as busy building homes in west Lake County this year, but that won't hurt him all that much.

"I've had five to six years of working day and night with no time off," says Lantz. "I could use a slow year. But I am worried about the folks I have working for me. In the past, if I had to build a couple of more houses on spec (without a buyer) to keep them working, I would. This year I'm not going to do that."

Fueled by a migration from Chicago and the city's Illinois suburbs, Northwest Indiana has seen a building boom the last few years unlike anything it has seen in more than a decade.

Most areas outside the central cities saw growth the last few years, and even Gary and Hammond saw a modest pickup in building.

St. John saw its growth continue, from 99 building permits in 1988 to 146 in 1989 to 203 last year. Munster has seen similar growth, going from 22 permits in 1988 to 84 last year.

But Dyer saw new home permits level out at 115 last year, only eight ahead of 1989. Schererville has sen the number of permits drop from 336 three years ago to 295 in 1989 to a still-healthy 213 in 1990. Unincorporated Lake County had 251 home building permits issued in both 1988 and 1989, but only 220 last year.

According to the IU Center for Real Estate Studies, the median home in the Gary-Hammond-Valparaiso area sold for $65,000 in the third quarter of 1990, up from $59,900 a year earlier.

Farther west in the Michigan City-LaPorte area, the center's median home figure was $54,900 for the third quarter of last year, up from $52,500 a year earlier.

SOUTH BEND/MISHAWAKA

With a few exceptions, it's pretty much business as usual in the South Bend/Mishawaka/St. Joseph County residential real-estate market.

"It's not boom times, but, at least for our company, performance is right at our projections--about the same level as this time last year," says Mike Mangold, president of Coldwell-Banker Anchor Real Estate.

According to one agency owner, three factors are tending to soften the market: St. Joseph County is overbuilt in the growth areas, such as Granger. These are primarily homes in the $100,000-plus price range. Second, due to continued media discussions of the recession, buyers seem to be braced for recession even though its effects have been relatively minimal. Finally, global affairs are creating a lot of uncertainty.

"Any one of those factors could cause a slowdown, but the combination has really hit hard," notes Jim Dunfee, owner of Century 21/Jim Dunfee Realty.

Housing costs and mortgage rates and availability are definitely not factors in the softening market. South Bend remains among the most affordable real estate markets in the state. According to the IU Center for Real Estate Studies, the median cost of a home in South Bend/Mishawaka is $56,250, per figures available in the third quarter of 1990. That's up from $49,500 a year earlier.

According to the local Multiple Listing Service, the average selling price for the 2,954 homes sold in 1990 was $68,117. 1990 also saw a small but steady increase in sales activity over 1989.

"I think that 1991 will be a pretty stable year in the St. Joseph County real-estate market," says Steve Dean, president of Cressy and Everett, a Better Homes and Cardens real-estate franchise and a major developer in the area. "So far, the market looks strong. We don't anticipate much change taking place, even though things softened a bit during the fourth quarter of 1990."

"We're very optimistic," concludes Mangold. "One of the reasons is that our winter open house traffic has been high, and that means there are some serious buyers out there."
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Author:Derk, James S.; Mayer, Kathy; Margolis, Jay; Kaelble, Steve; Isidore, Chris
Publication:Indiana Business Magazine
Date:Mar 1, 1991
Words:2016
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