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Is the Northwest Indiana Real Estate Market Slipping? You Decide...

by Jana Caudill

As I'm sure you've seen in newspapers and on TV, the national real estate market is falling in 2006. The national average of home sales is down, so people always ask me, "How is the Northwest Indiana real estate market doing?" It's an easy answer... great!

It's important to remember that real estate is a local market driven by local conditions. You also need to remember that if the national AVERAGE is down, that means that some areas must still be doing well... that includes Northwest Indiana.

More homes will be sold in Northwest Indiana this year than ever before. And in most communities, sellers are getting more for their home than in 2004 and 2005. Here is a look at how some major Northwest Indiana communites are doing.

KEY: HS: Homes Sold; DOM: Days on the Market; ASP: Average Sales Price

Community 2004 HS 2004 DOM 2004 ASP 2005 HS 2005 DOM 2005 ASP 2006 HS 2006 DOM 2006 ASP
Hammond* 420 73 $79,874 449 72 $84,479 528 70 $81,124
Griffith 123 63 $126,171 153 60 $131,610 157 65 $132,521
Highland 167 57 $142,966 226 63 $148,435 247 70 $142,023
Munster 222 78 $230,476 215 79 $232,871 230 74 $238,615
Dyer 143 67 $204,581 185 73 $206,951 179 74 $230,617
Schererville 380 72 $187,678 405 67 $203,709 410 76 $217,351
St. John 108 94 $212,313 122 76 $257,327 135 85 $291,186
Cedar Lake 139 86 $132,843 123 98 $159,145 168 76 $181,789
Crown Point 385 75 $165,718 448 72 $181,271 430 70 $192,965
Winfield** 91 95 $211,179 146 99 $227,363 81 134 $244,826
LOFS** 110 95 $154,543 166 83 $159,385 122 88 $189,465
Merrillville 439 72 $114,644 379 77 $119,222 479 59 $122,570
Hobart 357 87 $122,519 367 79 $129,997 406 81 $136,351
Valparaiso 492 85 $176,420 528 79 $189,392 486 81 $192,504

Data is from GNIAR MLS: January 1-September 20 of 2004, 2005 & 2006.

*Hammond includes MLS Areas: Hammond North & Hammond South

**LOFS: Lakes of the Four Seasons (not included in Winfield Township information)

What does this mean? In most markets the Days on the Market is about the same (give or take a few days). The only market with a huge increase in DOM is Winfield, but home values are continuing to rise. Only two markets, Hammond and Highland, saw a decrease in home values from 2005 to 2006. And both Merrillville and Cedar Lake are seeing a decrease in days on the market... homes are selling faster in those two communities than in 2004 and 2005.

Bottom line... if you're thinking about selling your home two things ring true: 1) YOUR HOME MUST BE PRICED RIGHT! When you overprice, you miss your buyer. 2) YOUR HOME MUST BE MARKETED CORRECTLY! You need to find ways to make your home stand out from all the other homes on the market. I know my team does both of those well, call or email me anytime and we'll be happy to help you get your home sold!

Indiana city leads the nation in housing affordability

by Jana Caudill
Most affordable housing markets
Midwest cities lead the nation in housing affordability, according to an index by the National Association of Home Builders and Wells Fargo.

Story from www.cnnmoney.com - August 22, 2006

When it comes to affordable housing, no region can top the Midwest: Nine of the top ten of the nation's most affordable housing markets are there, according to the latest National Association of Home Builders/Wells Fargo Housing Opportunity Index.

The report said that affordability suffered just a little during the second quarter of 2006, as housing prices stayed about the same but mortgage rates ticked up.

Indianapolis has retained its status as the most affordable large city in the United States for home buyers and Springfield, Ohio was No. 1 when smaller cities were included in the rankings.

About 40 percent of homes in the United States were deemed affordable to families earning the national median income of $59,600. That was down from 41.3 percent in the first quarter.

The index tries to capture a snapshot of affordability by calculating housing expenses and comparing them to income. Housing expenses include property taxes and insurance as well as the mortgage payment. The formula calls for all that to be no more than 28 percent of income.

The final index number is the percentage of homes sold during the quarter that families earning the median income could afford to buy.

In Indianapolis, 87.4 percent of all the homes sold there during the second quarter were affordable to anyone earning metro area's median household income, $65,100. The median price for a home was $120,000.

Contrast that with the Los Angeles /Long Beach/Glendale housing market, the nation's least affordable, where just 2 percent of all the homes sold during the quarter were affordable for those earning the median family income of $56,200. The median home in Los Angeles costs $521,000.

Other major metro areas suffering severe affordability problems were Santa Ana/Anaheim and San Diego, in California, and the New York metro area.

Smaller unaffordable metro areas include Salinas, Merced and Modesto, all Golden State cities.

The most affordable markets were located mostly in the Midwest. Detroit/Livonia/Dearborn, Michigan; Grand Rapids/Wyoming, Michigan and Buffalo/Niagara Falls, New York led the way.

Natural gas prices head up

by Jana Caudill

From The Times of Northwest Indiana
September 6, 2006

Natural gas prices for utility customers are again headed up, but predictions are they will be less severe than last year, when two Gulf Coast hurricanes blew prices up.

NIPSCO on Tuesday announced the natural gas supply portion of a customer's bill will increase 15.5 percent in September. A typical customer using 50 therms of natural gas can expect an increase of $7.22 from his or her August bill.

Nicor customers in Illinois will see an increase of about 18 percent in their September bills.

NIPSCO has 712,000 natural gas customers in northern Indiana, and Nicor has more than 2 million customers in Illinois.

Some very hot weeks this summer drove up consumption of natural gas by gas-fired electric generation plants, according to Jim Deering, president of Nordic Energy Services LLC, of Willowbrook, Ill. That drove up demand and caused some gas in storage to be withdrawn, driving up prices.

Still, last year at this time, utility customers were paying almost double what they are now for natural gas.

"Historically, it's still pretty high, but it's significantly below where it was last year," Deering said.

Nordic provides energy management services for more than 500 industrial and commercial facilities with annual energy requirements of $150 million. It is an approved supplier for Nicor Customer Select and NIPSCO Choice programs.

Prices for utility customers spiked in September and October of last year, when Hurricanes Katrina and Rita knocked out a good portion of natural gas production in the Gulf of Mexico. Prices fell through the winter and were stable for most of the summer.

Going into this fall, natural gas in storage in the United States is running about 12 percent higher than the average for the past five years, according to the U.S. Energy Information Agency.

That ample storage should keep prices stable, according to the agency's most recent short-term outlook. The agency predicts natural gas prices will actually drop about 3 percent in 2007 as compared to 2006.

Wild cards like hurricanes and the face-off between Iran and the United Nations over Iran's nuclear ambitions could still cause dramatic swings in prices, Deering said. But overall, the ample storage situation bodes well for consumers.

Energy consumers also are getting more savvy about conservation and hedging energy prices, which is also helping smooth out price shocks, Deering said.

Local utility companies like NIPSCO and the Energy Information Agency will be making detailed winter energy forecasts in October, which will give a more exact picture of where prices are heading.

Mortgage rates dip to lowest level since early April

by Jana Caudill

From The Times of Northwest Indiana - September 1, 2006


WASHINGTON -- Rates on 30-year mortgages fell for a sixth consecutive week, providing home buyers with more relief from an earlier rise in rates.

Mortgage giant Freddie Mac said Thursday that 30-year, fixed-rate mortgages dipped to 6.44 percent this week, down from 6.48 percent last week.

That was the lowest level for 30-year mortgages since they averaged 6.43 percent the first week in April.

Mortgage rates hit a four-year high of 6.80 percent the week of July 20, before beginning a sustained decline as financial markets became more convinced that a slowing economy would keep inflation under control.

"Mortgage rates continued to drift lower this week in large part because of the cooling in the housing market and in consumer confidence, thus giving financial markets reason to believe that economic growth will moderate and inflation will remain in check," said Frank Nothaft, chief economist at Freddie Mac.

Sales of both new and existing homes set records for five consecutive years through 2005 as buyers reacted to the lowest mortgage rates in more than four decades.

But sales activity has slowed this year with many analysts forecasting a decline in both new and existing home sales of around 10 percent.

The Federal Reserve at its last meeting on Aug. 8 left interest rates unchanged, breaking a two-year period of rate increases. Many private economists believe the central bank may be finished raising rates as long as inflation pressures remain reasonable.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 6.14 percent this week, down from 6.18 percent last week.

For one-year adjustable-rate mortgages, rates dipped to 5.59 percent, down from 5.60 percent last week.

Rates on five-year adjustable-rate mortgages fell to 6.11 percent this week, down from 6.14 percent last week.

The mortgage rates do not include add-on fees known as points. Thirty-year mortgages and 15-year mortgages both carried a nationwide average fee of 0.4 point. One-year ARMS carried a nationwide average fee of 0.7 point while five-year ARMs carried a fee of 0.5 point.

A year ago, 30-year mortgages averaged 5.71 percent, 15-year mortgages stood at 5.32 percent, one-year ARMs were at 4.48 percent and five-year ARMs averaged 5.30 percent.

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Contact Information

Photo of The Jana Caudill Team Real Estate
The Jana Caudill Team
Redkey Realty Leaders
503 East Summit St., Suite 2
Crown Point IN 46307
219-661-1256
Fax: 219-663-5949