The crunch of our Indiana economy was felt in the Indianapolis real estate market by the dissolving of such Indianapolis home builders like Davis Homes and CP Morgan. Once the initiators of thousands of Indianapolis homes for sale, when these companies when under, many felt it was certainly a sign of the times and an indicator of tougher times to come for all Indianapolis home builders.
There is reason, however, for Indianapolis home builders and real estate followers to be optimistic. Perhaps spurred on by incentives like the $8000 First-time Indianapolis Home Buyer Tax Credit, The National Association of Home Builders (NAHB) reported a rise in their housing market index for September. This marked the third consecutive month for an increase. The rise obviously promotes a feeling of optimism about home sales increasing in general.
NAHB cited an increase of one point in the index to 19. Since it peaked around 20 in April, 2008, this has been the highest number reported. Readings from the index under 50 are indicative of negative feelings about the housing market. Like many other housing market indicators of better times during 2006, April of that year was the last reported time the index went above 50.
The index reported surveyed approximately 530 developers of residential property across the nation. Conditions in current sales saw a rise to 18, up two points. Buyer traffic went up to 17, an increase of one point. However, the expectation for sales went down to 29, a fall of one point.
In other optimistic news, home builders saw a stock jump immediately after the report release. Beazer Homes, one of several Indianapolis home builders, saw an increase of around ten percent. A similar increase was reported by Hovnanian Enterprises and Lennar Corp. who also witnessed a six percent increase.
Recently, opinions have been released that the recession is over. Perhaps we are seeing some manifestations of this proclamation because even considering a tough job market and other factors, sales of new homes have gone up for solid four months now. Prices are following in its path having inched up over the last two months as well. Numbers for home builders are looking up in general and reported higher than was anticipated for the last quarter.
Experts are speculating that part of this overall increase is due to the First-time buyer tax credit which will expire by late November. Economists are nervous that the expiration of this tax credit, along with the tougher standards we are seeing to have mortgages approved, will endanger the recovery in the real estate market we may be seeing. They state that there must be a plan in action to maintain the upward momentum being witnessed.
In light of this, the NAHB is putting forth a Congressional lobbying effort to have the tax credit extended for another year. In addition, they would like to see the benefit extended to all buyers.
Overall, builders appear to be moving forward in the glow of optimism reflected from this report and others like it. They are anticipating further improvement in sales and subsequently can be found lessening incentives, raising home prices and procuring land to build more neighborhoods. KB Homes in particular has stated that they are picking up their development in the Mid-Atlantic area, especially around Washington DC. Attempting to not be one of the casualties, KB Homes had cut back its development in slower markets during 2007.
We can slowly see the building industry coming back in Indianapolis. Drive around select Indianapolis neighborhoods and you can see new homes being built again which is a positive sign for our economy.