Fewer for-sale homes can mean rising prices
One effect of a smaller number of houses on the market just might be rising prices.
Average prices for Allen County homes listed with Realtors in May rose by 10.3 percent over the same time in 2013, according to data compiled by Indiana Regional Multiple Listing Service. The average price for May rang up at $143,092, as compared with $129,682 in May 2013.
Todd Stock, managing partner/owner of Re/Max Results in Fort Wayne, says one reason for the increase might be that more new construction, generally priced higher than existing homes, is making its way onto the sold rolls and driving up the average. New construction under a sales contract was up 17.6 percent in May over the previous year, he says.
Plus, Stock adds, “The higher end of the market has been very busy.”
Overall, he notes, Allen County prices rose only about 3.5 percent so far in 2014 over the same period last year and interest rates remain low, so affordability is still good.
But when inventory goes down and demand goes up, prices tend to follow.
“We definitely need more inventory – good, good-quality, inventory. There’s just tremendous demand.”
Fort Wayne Realtor Robert Justice recently got an offer he couldn’t refuse.
No, not on a house. On a chance to do some advertising.
A representative for a mortgage company was willing to print color postcards with both their names and faces plus contact information and mail them to potential home sellers in a popular area on the city’s north side. The mailing was free.
“It’s funny. I don’t do a whole lot of that kind of marketing,” says Justice, with North Eastern Group Realty. But with the number of homes on the market listed with Realtors down, he says, he’ll take all the help he can get in finding houses to sell.
“If they mail out a thousand or 2,000, and I get five calls and two deals, I’m ahead,” he says.
In the Fort Wayne area, 1,909 homes were for sale with Realtors as of July 3, according to statistics compiled by the Upstate Alliance of Realtors which covers Allen, Adams, Jay, Wells and Whitley counties.
Last July, that number was 1,998. The year before that it was 2,235, and the number goes up every year back to 2007, when it stood at 3,187, around the time the housing bubble burst.
But with the number of Upstar members holding steady at about 1,300 in recent years and housing sales inching upward in recent months, that means more scramble among the area’s Realtors to win houses to list.
“Having inventory (to sell) is key,” says Adam Smith, Upstar president and a Realtor with Coldwell Banker Roth Wehrly Graber in Fort Wayne, who explains that listings mean double commissions for Realtors when they sell houses they’ve listed.
Smith says he thinks the drop in listings this year may partly be the result of the winter’s bad weather and a later end to the school year. Fewer people were willing to put their houses on the market earlier in the traditional selling season that runs from early March to early November, he says.
But as selling season nears its peak, he says it’s been more difficult for agents and brokers to find certain house styles, neighborhoods or price ranges.
“That 1,200- or 1,300-square-foot 3-bedroom may not be out there, or it may not be out there yet,” he says.
Dave McDaniel, a Realtor with Re/Max Results in Fort Wayne, says the listings situation among agents is probably not quite as competitive as the numbers suggest. He says a relatively small proportion of Realtors traditionally do the bulk of their work locally, while the rest see their job as part-time or as a second or extra income.
But there’s little question that much of the area continues in “a strong seller’s market,” he says.
He points out that the supply of houses in Allen County has shrunk to just under a 4-month supply this month from about a 5-month supply for the same time last year. A balanced market – in which neither buyers nor sellers have the upper hand – starts at a 6-month supply.
Upstar statistics show that in May, the average time a house remained on the market in Allen County was 68 days.
“Right now, a well-priced home in great shape goes really fast,” McDaniel says, adding multiple offers in a matter of days are not uncommon.
“I’ve heard of Realtors door-knocking or hanging cards on the doorknob or doing mailings” for listings in areas in demand, he says.
Along with traditional advertising, some Realtors are including information such as “Sold in 10 days” on their yard signs in hope of getting similar sellers to call them. Some are even cold-calling, while many are mining social networks on Facebook or LinkedIn and texting or emailing prospects, Justice says.
He says that’s a reflection of the how the listing business has changed in recent years – more use of technology and a little less personal contact.
On the postcards reading “It’s the perfect time to make your move,” Justice offered to do “a free home evaluation” for potential sellers. The offer is something many Realtors do anyway for prospective listers, he says. But it doesn’t hurt to point it out, he says, on the chance the phone will ring.
“I haven’t got a whole lot of feedback from it. I wasn’t looking for a boatload of responses,” he says of the mailing.
But, he notes, you can’t sell what you don’t have.
“Right now it’s very low inventory. People selling houses – they aren’t taking a whole lot of time to sell because there just aren’t that many out there. Things are moving pretty quickly.”