Fort Wayne builder Tony Reincke said the tide turned last summer.
Despite the economy’s sluggishness, he found himself with an unexpected problem – a lack of properties for people wanting new homes.
We couldn’t find lots, said the president of Granite Ridge Builders. We had buyers, but we couldn’t find adequate lots for some of them. That just kept coming up. This year, we’re going to make accumulating lots a priority.
The builder still fared well in 2012 as northeast Indiana’s top builder in both the number of homes built and dollar volume – $32.7 million, according to the Home Builders Association of Fort Wayne.
As for existing home sales, Coldwell Banker Roth Wehrly Graber was the top real estate firm in the Fort Wayne area last year with more than 2,800 houses sold, said John Bellio, president of the company.
Adam Smith, a broker with Coldwell Banker, is president of the Upstate Alliance of Realtors.
Things are definitely on the upswing, he said. The short sales and foreclosures are out there, but they’re not flooding the market like before in big waves.
But housing market watchers want to know if the strides are sustainable and not merely a momentary blip before depressed properties drag on the industry again.
There are good reasons to think otherwise.
Single-family home construction permits last year in Allen County showed a modest gain over 2011 with a 1.6 percent increase or 691 requests to build. Home Builders Association of Fort Wayne President Charlie Giese said he expects progress to be steady as foreclosures remain a factor.
Last year, Allen County had 1,586 foreclosures, up 30 percent from 2011. Despite that, the average sales price last year rose nearly 22 percent to $226,058. Giese knows the industry must keep looking over its shoulder, but we are seeing a lot of momentum in the early part of this year, and that’s a good sign.
Another good sign is the year-end report from the Upstate Alliance of Realtors. Last year, 6,602 houses sold – an increase of 10.1 percent from the previous year. The association also said the average sale price in 2012 increased nearly 9 percent from a year ago to $126,513.
Upstate tracks data primarily from Allen, Adams, DeKalb, Huntington, Noble, Wells and Whitley counties.
Because of the low interest rates, we have people that are moving up to bigger houses because it would only mean 100 bucks more on their mortgage, but they’re getting almost twice the house in some cases, Smith said.
Reincke is developing the $1.5 million, 44-home Parker’s Bay Villas subdivision on Parkplace and Cherrywood drives, near Parkview Regional Medical Center. The project is aimed at busy families seeking to downsize. Parker’s Bay Villas will offer three-bedroom, three-car garage residences estimated to cost $175,000 to $250,000.
Residents will pay a neighborhood maintenance fee for lawn upkeep.
We already have people interested, he said. What we do is take their imagination and turn it into a home for them.
Nationally, of course, housing is a big deal to the economy. The industry accounts for roughly 20 percent of the U.S. gross domestic product.
Last month, the Commerce Department said new-home sales in the nation rose nearly 20 percent to 367,000 in 2012, compared to 2011. The showing is the most since 2009, although the increase is coming off the worst year for new-home sales since the government began keeping records in 1963. Sales are still below the 700,000 level that economists consider healthy.
National sales of existing homes rose to their highest level in five years – 4.65 million, a 9.2 percent spike over 2011, according to the National Association of Realtors. Most economists agree that home sales are improving gradually and that the gains should continue this year.
Stable hiring, record-low mortgage rates and a tight supply of available homes have helped sales and prices in most markets. The rate on the 30-year fixed mortgage averaged 3.66 percent in 2012, the lowest annual average in 65 years, according to Freddie Mac.
But since the housing bubble burst six years ago, banks have adopted tighter credit standards and are requiring larger down payments, making it especially difficult for first-time buyers.
We just have to learn how to adapt, Giese said.
Walter Molony, spokesman for the National Association of Realtors, said so many other industries are linked to housing that it can’t afford to falter.
Carpet companies, furniture, landscaping and all kinds of contractors have their health tied to the housing sector, he said. It has such a broad economic impact.
The Associated Press contributed to this story.