Housing: Positive Outlook for 2019
The Indiana housing market in 2018 has been a study in extremes. For instance, house prices increased by nearly 8 percent over the last year—the state’s strongest rate of appreciation on record Surging prices have yet to temper demand, however, as Indiana is on track to set a new high watermark for annual existing home sales. Meanwhile, the inventory of homes on the market continues to dwindle—yet new residential construction, while clearly on the rise, remains slow by historic standards, especially for smaller, entry-level homes.
So while the market is poised for another strong year in 2019, some of these trends are surely unsustainable, which suggests there could be some market shifts on the horizon.
2018 in review
Indiana is on pace for more than 89,000 existing home sales in 2018. If the state reaches this mark, it would be the second consecutive year Indiana posts a record sales tally. Such strong demand, coupled with relatively low levels of residential construction, has contributed to a dramatic decline in the inventory of homes on the market (see Figure 1). In fact, Indiana’s average monthly inventory is likely to drop by at least 12 percent in 2018, which would be the third consecutive year with a double-digit decline in this measure.