Johnson County’s housing market doing well despite low inventory, interest rate concerns

Johnson County’s housing market continues to be strong halfway through 2024, realtors say.

Nearly halfway through the year, sales prices, closed sales, new listings and inventory are up. The median number of days on the market is up compared to last year, while the average number of days is down.

While it is slower than in years past, realtors are still selling homes and helping buyers and the market is moving right along.

“I don’t think it’s going to be the way it was five years ago, but yeah, we’re still working. Everything’s good,” said Ron Rose, a real estate broker with Greenwood-based Indiana Realty Pros.

What the numbers say

Sales prices continue to rise in Johnson County, with the median sales price being $330,000 in May — a 4.1% increase compared to May 2023. Year to date, sales prices are up 5.7% with a median price of $317,000, according to data from the MIBOR Realtor Association. The data includes the 16-county area around Indianapolis.

The number of closed sales in Johnson County is also up 7.1% year-to-date and 875 homes have sold so far in 2024. There were 227 closed sales last month, a 2.7% increase compared to May 2023, MIBOR data shows.

Pending sales are also up 3.9% year to date. In May, there were 244 pending sales, a 28.4% increase over May 2023’s 190, data shows.

In terms of new listings, there were 299 homes added to the market in May — a 20.6% increase compared to May 2023. Year to date, new listings are up 7.1% this year compared to 2023, according to MIBOR data.

The average number of days on the market is down 13.9% when comparing May 2023 to May 2024. however, the median days on the market is up 50% from May 2023, going from six to nine days, data shows.

As for active inventory, there were 287 homes on the market this past May — a 24.2% increase from 231 in May 2023. There is about a 1.3 months supply of inventory, according to MIBOR.

The average daily home inventory was around 321, according to data from Indiana Realtors.

Compared to the rest of the region, Johnson County is on par, according to MIBOR.

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Mortgage rates

Over the few last years, higher mortgage rates have been a concern for potential homebuyers.

2023 was the slowest year for U.S. home sales in nearly 30 years, the Associated Press reported. Increased mortgage rates and low inventory were the primary causes of this.

During the COVID-19 pandemic, mortgage interest rates were lowered to around 3%. However, they began steeply creeping upward in 2022, a trend that continued into 2023.

For the first half of 2024, national interest rates have averaged around 6.9% for a 30-year fixed mortgage and 6.16% for a 15-year fixed mortgage, according to data from FreddieMac.

But Rose says concerns about mortgage rates from homebuyers have begun to lessen.

“We’ve gotten past the idea that 7% is not ridiculous, even though it seems like it was because we had 3% before,” Rose said. “But I think people are settling into the idea that 6.5% is probably reasonable.”

New construction builds, for example, periodically run special interest rates. When these rates are run, builders tend to sell more new homes because existing homes can’t compete with these rates, Rose said.

“If you’ve got an interest rate of about 7% [for an existing home,] and you’re being quoted 4.99% [for a new home,] it makes it very attractive to buy the new house,” he said.

In Rose’s view, buyers are also starting to think of buying a home further out from a community than before. They’re looking for more features and are becoming more willing to drive further to work, he said.

Looking ahead

For Rose and the team at Indiana Realty Pros, they have had consistent work and have not experienced any downturn in the market. Going forward, Rose expects that that to remain the same.

But he hopes one thing does change: inventory. If there were more homes on the market, then they could sell more, he said.

“Right now inventory is so short,” Rose said. “Prices are still going up, and the inventory is still very tight. So I think that’s about the story of 2024.”

In May 2024, there were 287 homes on the market for the county. However, this is a 20.5% decrease from May 2019. That May saw an inventory of 361, according to MIBOR data.

It would also be nice if interest rates came down. There are some people out there who feel it’s a bad time to sell their home because they either have a low interest rate or no mortgage. If they go out to look for a new mortgage, the rates may be around 6.5%, which can be off-putting for them, Rose said.

While it can’t be hoped for the rates to drop lower than 6%, it would be nice if they got as low to 6% as possible, he said.

“If they got down to about 6%, I think that more people would put their homes on the market and have an opportunity to upgrade their house,” he said.

As of June 13, nationwide interest rates averaged 6.95% for a 30-year fixed mortgage and 6.17% for a 15-year fixed mortgage, according to data from FreddieMac. For Indiana, interest rates were 7.13% for a 30-year fixed mortgage and 6.69% for a 15-year fixed mortgage as of Thursday, according to BankRate.

Despite this, Rose feels the market is in good shape heading into the second half of 2024.

“I feel the market is is in good shape,” Rose said. “We just need more houses and the inventory, and like I said, we can definitely find buyers for them even though the rates are a little bit higher.”