A new year, a new home.
Housing officials in northeast Indiana hope that’s true for many residents in 2015. The National Association of Realtors and the National Association of Home Builders have reason for optimism.
Lawrence Yun, chief economist for the Realtors association, projects that existing-home sales will rise more than 8 percent in 2015, which amounts to 5.3 million houses.
Home Builders chief economist David Crowe expects single-family housing starts to increase 26 percent to 802,000 next year.
Those kinds of figures would certainly bolster the housing market – if they come to fruition.
Consumer spending accounts for 70 percent of economic activity in the nation. Buying a home is the biggest purchase a person will make. So, naturally, the housing industry is important to economic recovery.
But what about our housing honchos in northeast Indiana? What are their 2015 projections? We asked, and they responded. They are Kim Ward, secretary-treasurer-elect of the Upstate Alliance of Realtors; Greg Gerbers, president-elect of the Home Builders Association of Fort Wayne; developer Mark Heller of Heller Homes; and Larry Anderson, a real estate agent with Coldwell Banker Roth Wehrly Graber.
Q. What do you think 2015 will bring for northeast Indiana’s housing market?
Ward: All signs are pointing to a really strong year. I work for a real estate and development company, North Eastern Group Realty, and we had more than a half-dozen projects that were either new subdivisions or additions to existing sections this year. During the Parade of Homes, we had some 17,000 people who came out during the week. That tells us that people are thinking about new homes.
Gerbers: The housing starts are doing well. As of Nov. 30, there have been 707 single-family construction permits requested. Even though that is a 9.3 percent decline from the first 11 months of 2013, activity is holding strong. And we still have low interest rates between 3.5 percent and 4 percent.
Heller: Everybody got crushed in 2009 and 2010. But the great thing about Fort Wayne is that unlike the other parts of the country, home appreciation never goes way up, and depreciation never goes way down. That’s the great thing about the local economy. We’re more stable. That has us positioned to do well next year. We’re the sixth-largest builder in the area, according to the Home Builders Association. We’ve had our best year and started our first subdivision development in about a decade in southwest Fort Wayne on Covington Road.
Anderson: Overall, we expect interest rates will remain low, and with the good job activity that has been going on, the low fuel prices and the loosening of housing lending, things should go really well. Another thing is the Federal Housing Administration loans are expected to drop, which allow more people to qualify for medium to lower-end homes.
Q. There’s been a lot of concern over the "working poor" and stagnant wages. How will this affect the housing market in 2015?
Ward: Well, it isn’t positive. We know it’s more expensive to build a home and more expensive to develop land. We just have to hope that we’re on the right track with some of the recent employer growth, like Parkview and Lutheran in the health care field, as well as other industries. A lot of positive things are happening. We have a great base.
Gerbers: Low interest rates should make owning a home more affordable.
Heller: We own Bluffton Park Apartments, and occupancy is about 95 percent. That speaks to how things are going somewhat as well. A lot of people are still renting. It does take a long time to get a loan across, probably 100 times longer. Every t is crossed and i dotted, and then some. That can discourage would-be home buyers. It is tough.
Anderson: Hopefully, the loosening of regulations, like lower FHA loan rates, will give others an opportunity to purchase lower-end homes.
Q. The one thing the local housing market doesn’t need to see next year is:
Ward: An increase in interest rates. We’ve gotten used to 3 to 4 percent interest rates, and if it were to creep up, it will take people awhile to adjust to that. We’ve gotten a little spoiled and expect lower rates now.
Gerbers: Negative advertisements lumping us in with other areas that may have slower markets.
Heller: Fear. Interest rates will probably remain low, but people still worry about things like that and job security. We need to take a look around at the overall picture, though. The multimillion-dollar investments being made in downtown show the confidence companies have in the city. It shows progress and that Fort Wayne is a stable city.
Anderson: I have no reason to believe it will happen, but higher interest rates. We don’t need to see that. We also don’t need to have more foreclosures, which would drive home prices down.