Keeping up with the latest news on the South Bend, Indiana real estate market might leave you with more questions than answers. Is the housing boom coming to an end? Is the market in for a crash or simply a correction? Here’s the clarity you need.
Compared to the extraordinary highs of the past two years, the South Bend housing market is showing signs of moderation. However, it’s essential to remember that those two years were nothing short of record-breaking in virtually every aspect. Record-low mortgage rates and millennials reaching their peak homebuying years generated an overwhelming surge in buyer demand. Simultaneously, the supply of available homes failed to meet the demand due to years of underbuilding and sellers hesitating to list their homes amid the health crisis.
This unusual combination created an environment of record-high demand and record-low supply, which was ultimately unsustainable for the long term. Recent data indicates early indications of a return to a market pace resembling the years leading up to the pandemic. This isn’t a crash or correction, but rather a shift, as noted by realtor.com, “The housing market is at a turning point… We’re starting to see signs of a new direction…”
Home Showings: Then and Now
The ShowingTime Showing Index, which tracks home showing activity reported by agents and brokers, provides a reliable measure of buyer demand. A closer look at the data dating back to 2019 reveals the following (see graph below):
The gray bars represent pre-pandemic demand in 2019. During the pandemic (shown in blue), home showings surged. While recent data indicates a slight moderation in current buyer demand (shown in green), showings remain above 2019 levels.
Considering that 2019 marked a robust year for the housing market, this evidence suggests that the market isn’t experiencing a crash but is instead returning to a more pre-pandemic norm.
Existing Home Sales: Then and Now
Recent headlines are also highlighting a decline in existing home sales. However, perspective is crucial. A look at existing home sales data dating back to 2019, based on information from the National Association of Realtors (NAR), reveals the following (see graph below):
Once again, a similar narrative emerges. The pandemic years (shown in blue) surpassed the more typical 2019 home sales (shown in gray). According to the latest projections for 2022 (shown in green), this year is on track to outperform 2019 in terms of home sales.
To gain an accurate perspective, it’s important to compare the current market not to the extraordinary pandemic years but to the most recent “normal” year. First American sums it up succinctly, “…today’s housing market looks a lot like the 2019 housing market, which was the strongest housing market in a decade at the time.”
If recent headlines have raised concerns, it’s crucial to view the market through the lens of a more typical year. The South Bend real estate market is not undergoing a crash or correction; it’s simply transitioning toward a more typical, pre-pandemic state. For personalized insights into what this means for your real estate endeavors this year, don’t hesitate to consult a trusted local real estate professional.
