Indianapolis Foreclosures Still a Big Portion of Home Sales

by Simon Lindsay on cities

Indianapolis foreclosures are still accounting for a big portion of total home sales in the city despite a decline in foreclosure activity in 2009 and in January this year, according to interviews with local realtors.

According to realtors, bank foreclosures accounted for around 24 percent of all home sales over the past few months, pushing home prices down by about 3 to 4 percent. They also said that about 16 percent of all new real estate listings were foreclosures. The length of time to sell a home, however, improved from nearly 11 months to nine months, as more first time buyers and move-up buyers are taking advantage of the enhanced federal tax credit program.

The realtors also said that investors continue to be more aggressive in finding lower-priced foreclosures as homes in Indianapolis continue to be the most affordable among cities in the country. A housing affordability report from Wells Fargo and the National Association of Home Builders reported that over 95 percent of all residential properties sold in Indianapolis area were affordable to all median-income households in the metro area.

According to the affordability report, the median home sales price in Indianapolis in the last quarter of 2009 was $106,000.

According to another report from an online real estate firm, Indianapolis foreclosures comprised 26.8 percent of homes available for sale in February, higher by about 3 percentage points than the estimate by local realtors. Out of around 9,500 homes offered for sale in Indianapolis in February, about 2,500 units are foreclosures. The rest are pre-owned homes and new homes, with existing homes accounting for a bigger percentage than newly-built homes.

The average price for homes in Indianapolis in February, according to this online firm, was $121,711, marking an increase from the $107,011 average sales price in December 2009.

Residential foreclosures in Indiana slowed last year and in January this year. In January, the rate of foreclosure activity statewide dropped by 2.5 percent compared to December 2009. Total foreclosure filings reached 4,622, including 1,261 units already real estate owned. The number though was still 1.45-percent higher than total filings in January 2009 and still put the state 18th among states in foreclosure rate.

According to analysts, Indianapolis foreclosures did not ravage the city as much as foreclosures in other U.S. cities because of the continued competitiveness of the city’s medical and pharmaceutical sectors and the insurance and government enterprises operating in the city.