Calling all data lovers and number crunchers! Year end numbers for 2014 are here! It’s like Christmas morning all over again! The Indiana Association of Realtors just published their year end reports on the state of real estate in Indiana.
Anyone is free to pour over them, but in case you have better things to do, I will hone in on a few specific numbers and what they mean. Statewide, 2014 sales were down 1.6% from 2013. Locally (Monroe County), sales were down 4.4%. Oh my gosh! Time to panic! Real Estate is stumbling again. We all need to go find the nearest cliff and jump! Is what I would say if I didn’t dig a little deeper. Let me emphatically say NO. No need to become lemmings. It’s not that homes weren’t selling, but that there just weren’t homes to sell. How do I know that? Well, the first reason is that I was in the trenches last year and it was hard to find homes for buyers in certain price ranges.
But more scientifically, remember the old supply and demand lessons that Mr. McGeath taught in high school? (Well, it was Mr. McGeath for me; insert the name of your favorite economics teacher.)
If supply is down, but demand is high, then prices will go up, right? We see that at Christmas every year with whatever the popular gift of the year is. High demand, low supply creates crazy prices on EBay (and idiots fighting at Wal Mart). If real estate were stumbling, then demand would have been down. And low demand means low prices. But that isn’t what happened. Instead, median sales prices were up. Statewide, the median sales price went from $122,000 to $126,000 (3.3% increase). In Monroe county, our median sales price jumped from $151,000 to $156,900 (a 3.9% increase). So real estate continues its recovery, with a low supply and high demand. Why supply is low is a whole other column. Or call me, and we’ll discuss! Nothing like a glass of wine and a stack of real estate sales data