Think of it as a look in the rearview mirror.
For many, the financial impact of the Great Recession and the years that followed are not pleasant. And some of the pain is still being felt.
Income took a 3.4 percent dive in Allen County, while the number of people in poverty increased 3 percentage points to 15.6 percent.
In most northeast Indiana counties, income and poverty remained stagnant in the years since the recession ended in 2009, according to recently released census figures.
On the other hand, home values in northeast Indiana and across the state did not decline as they did in parts of the U.S. And the combined amount homeowners pay for mortgage loans, property taxes, utilities and related expenses went down here and nationwide.
Median home values in many of the nation’s less-populated counties held steady after the recession, while values in heavily populated counties declined, according to the U.S. Census Bureau.
The results are from the American Community Survey’s three-year estimates from 2007 to 2009 and from 2010 to 2012.
In comparing the periods during and after the recession, the bureau found that median home values in about 70 percent of counties with populations between 20,000 and 65,000 were not statistically different. That held true in northeast Indiana counties.
Nationally, the median home value was $174,600, a $17,300 decline from the 2007-09 period. The median home value in Allen County was an estimated $112,500 in the post-recession period, essentially unchanged. Value is the owner’s estimate of how much the property would bring if sold.
“I think that’s a continuation of a longer-term trend that we have seen in the area’s real estate market,” said Ellen Cutter, director of IPFW’s Community Research Institute.
She noted that local home values have remained consistent during the past 10 to 15 years, “and the local market was relatively shielded from those dramatic impacts from the Great Recession that other housing markets experienced.”
Adam Smith, president of Fort Wayne-based Upstate Alliance of Realtors, agreed that home prices changed little overall. But depending on location, there were some price fluctuations, he said.
“There are certain areas that we obviously have seen an increase in sales prices compared to 2007, I can tell you for sure, and certain areas since 2007 we probably have seen a decrease,” Smith said. “So, it is probably location-sensitive as to what the price – increase or decrease – has been.”
The region never saw a pre-recession bubble or a huge increase in home prices, Smith added.
“But when the market did go down, or tank, we did actually see a loss – not a huge loss like other areas,” Smith said. “Our houses weren’t worth half of what they were, but maybe a 5 percent decrease or 10 percent decrease in certain homes.”
While the overall Indiana homeownership rate declined by about 1 percent during the period, which follows a nationwide trend, the change in northeast Indiana was not statistically significant, according to the census figures.
About 70 percent of Allen County houses are owner-occupied. The rate among the surrounding rural counties was higher, with some approaching 80 percent.
If there is a bright spot in the post-recession years, it’s that monthly costs for homeowners declined significantly across the nation.
In northeast Indiana, median monthly costs for mortgage loans, property taxes, utilities, insurance, condominium fees and other expenses combined went down 4 percent to 12 percent.
In Allen County, those costs declined from $1,130 to $1,014 during the period.
This occurred at a time of record-low interest rates that prompted homeowners to refinance their mortgages. Property tax caps, which benefited many homeowners, also took effect during the period.
“I think refinancing is a big factor at play there in terms of the median household mortgage costs declining over this time period,” Cutter said.
Angela Proffitt, branch manager of the IU Credit Union in Fort Wayne, said many members took advantage of low interest rates in 2011 and 2012 to refinance loans. She said the payback term of her own mortgage was cut in half by refinancing from a nearly 7 percent interest rate in 2007 to below 3 percent in 2012, and the monthly payment is lower.
But the future is uncertain, she added.
“Those who purchased their first homes while interest rates have been so low may be surprised by their monthly payments if their needs drive them toward a larger home and interest rates are 2 to 3 percent higher than the current market,” Proffitt said in an email.
“Others who are looking to downsize to a smaller home will also have to consider that their payments for a smaller mortgage amount may have a similar monthly payment to their current homes.”
The financial cushion that low interest rates have provided in recent years is tempered by an overall decline in income since the recession. In Allen County, median household income went from an estimated $50,833 during the 2007-09 period to $49,088 since then. The state median declined 6.5 percent to $47,185 during the period.
Cutter noted that the county’s 3.4 percent income decline was also lower than nation’s 5.8 percent drop.
“It wasn’t eroded to the degree that we saw at the state and the national level,” she said of the county’s income average. “And the median household income that we’re at right now is actually higher than the state.
“And that was a surprising finding to me.”