Here’s why home values are appreciating like crazy in our market.
Inventory (aka the number of homes for sale) has been a thorn in the side of our market for the past two years, and it seems to just keep getting worse.
In the first quarter of 2021, home sales rose 6% year over year, while the number of homes listed dropped 9%. At the end of the first quarter, we had just 0.6 month’s worth of supply. Just to add some context, a six-month supply of homes is considered neither a buyer’s market nor a seller’s market. Anything above that is considered a strong buyer’s market—i.e., there are lots of homes for sale, and buyers can get good deals. Less than six months’ worth of supply is considered a strong seller’s market—i.e., there aren’t a lot of homes for sale, home values are appreciating, and sellers are getting a lot for their houses. The latter is what we’re seeing right now.
“If you’re thinking about selling, now’s a great time to do it.”
The number that shocked me the most from the first quarter, though, was home appreciation. Typically in Southwest Indiana, we see a yearly appreciation of about 2.4%. In 2020, we saw an appreciation of around 8%. Compared to the first quarter of 2020, homes appreciated by a whopping 20% this year. The average sale price was $192,500, which is a mind-blowing number considering that number was closer to $140,000 or $150,000 just a few years ago.
If you’re thinking about selling, now’s a great time to do it. We’re seeing homes sell substantially over asking price. My team and I listed a house in Newburgh a month ago that received 19 offers in just three days, and it ended up selling for $25,000 over asking price.
Buying can be a bit of a challenge, but the great news is that interest rates remain historically low (right around 3.25%), which is keeping homes affordable. Getting your offer accepted can be a challenge, but I’ve filmed several videos about how to strengthen your offer that you can view in my video library. Additionally, my team and I are always coming up with new ways to write our clients’ offers so that they’re the ones that are accepted.
If you have questions about our market, want to know your home’s value, or are thinking of making a move soon, don’t hesitate to reach out to me. I’d love to help you.