EVANSVILLE — The nationwide real estate market slumped in late 2018, as inventory shrunk and prices increased.
Those trends were evident in Southwest Indiana, as well, but observers said the local market is on solid footing as 2019 begins, especially if you're selling.
In Vanderburgh and 10 surrounding Indiana counties, 59 fewer housing units were sold in 2018 than 2017.
Sale prices, meanwhile, went higher. The value of local real estate transactions grew 6.4 percent last year, from $834.7 million to $888.1 million.
The average sale price across the 11 counties was $150,106, up 5.4 percent. Narrowing it down to Vanderburgh, Warrick, Posey and Gibson, the average sale price was $164,406, an all-time record.
"What we're experiencing right now is a true seller's market, but it's also a good time to buy while interest rates are still relatively low," said Tim O'Brien, president of the Southwest Indiana Association of Realtors.
Local construction of new single-family houses dropped in 2018 after a series of stronger years.
December results aren't yet included, but as of November, Vanderburgh County had 225 single-family home construction permits for the year.
Even a robust December would not bring the number back up to totals of the last three years (309 in 2017, 349 in 2016 and 302 in 2015). Vanderburgh's 2018 total is its lowest since 215 in 2011, as the economy was pulling out of recession.
Warrick County's total for 2018, excluding December, was 206, down from 226 and 235 the last two years. it's the lowest total since 124 in 2012.
"I’ve heard builders identify the cost of land, and the land development process as the key factors to increase in home building costs," said Bill Pedtke, director of the Southwestern Indiana Builders Association. "The costs of building materials and labor have increased, too."
O'Brien, though, expects the inventory of new homes and available existing homes to grow in 2019, giving potential buyers a variety of choices at different price points.
He also predicted more millennials will purchase homes.
"Inventory is going higher," he said. "Some sellers are stuck in a cycle of being afraid to list because they're not sure what alternatives are out there, but that is changing. In the new year, we're getting listings left and right, and people are real excited to put their home on the market."
The National Association of Realtors expects a stable housing market in 2019, with flat sales and home prices increasing, but at a slower pace.
“If mortgage rates trend sideways next year, as we anticipate, and home price appreciation continues to moderate, improving affordability should breathe some life into the housing market,” Doug G. Duncan, chief economist at Fannie Mae, told the Washington Post.
Although it's mostly a seller's market right now, O'Brien and Pedtke said local people interested in buying shouldn't fret; opportunities are out there.
Pedtke said current hotspots for new home construction in Vanderburgh County are in the McCutchanville area, north of the Evansville city limits, and in the Terra Vista subdivision off Telephone Road, on the city's East Side.
New starts also continue in neighborhoods off North Green River Road.
"We would encourage first-time homebuyers to contact a bank to learn more about the incentives provided to them because they’re likely to be closer to qualifying than they expect," Pedtke said. "The current status of home building starts, along with interest rates being very low, means it’s a good time to contact a home builder about a new home."