This article was originally published by Greater Fort Wayne Business Weekly on February 10, 2017. A photo of the O’Dowd family home — a symbol of the American dream — is the lead art for the piece. My grandfather, Thomas John O’Dowd, emigrated from County Roscommon, Ireland, with his twin sister, Mary, in 1893, coming through Ellis Island. He became owner of the D& M Store, which sold men’s clothing; the Rich Hotel of which Mary was the bookkeeper; and served as an Allen County commissioner. He had this house built in 1928. My dad, Jerome John O’Dowd, moved in as a 10-year-old and never left except to become a highly decorated naval officer in WWII. – Sally O’Dowd
The Fort Wayne/Allen County market is one of the hottest for home sales in the country, by a number of different metrics, many of which are based at least in part on its affordability compared to other areas across the nation.
In a recent study, SmartAsset ranked Fort Wayne as the fourth best city in the U.S. for early retirement, in part because it had the lowest housing cost burden of any city in the analysis.
In a separate ranking by SmartAsset, Fort Wayne came in seventh for home ownership by millennials, again in part because it had the most affordable home prices in the study’s top 10.
And, most recently, SmartAsset ranked Fort Wayne as the best city in which to raise a family, based on graduation rates, poverty and unemployment levels, cost of child care and housing costs as a percentage of income, among other factors.
Supply and demand
In Indiana, as of October, the demand for homes to buy in Allen was the highest, compared to supply, of any county in the state, according to data from the Indiana Association of Realtors and Realtor.com. As a result, list prices for last year, as of October, were up 15 percent, the largest increase among the state’s six larger counties. Homes in Allen also moved faster than in any of those same counties.
The Realtor metrics are based in large part on consumption, at how much faster homes are selling than they can be listed, and affordability is part of what drives sales, said Tony Didier, vice president of marketing at Coldwell Banker Roth Wehrly Graber.
The strong economy also is driving demand for housing in Fort Wayne, and Kim Ward, president of Upstate Indiana Association of Realtors and North Eastern Group Realty, attributes some of that to the redevelopment of the downtown area.
“You can’t discount what is happening downtown. It is really exciting…I think it is creating a real buzz,” she said.
Return on investment
Still, Fort Wayne has never been one of those markets where home values rocket up and sellers can cash in on a big growth in their investment in just a few years.
Generation to generation, a steady growth of 1 percent or so per year has been pretty typical, Ward said: “You’re not going to get rich buying a home here.”
Last year, however, the median sale price for an existing home in Allen rose 7.5 percent, ahead of the pace of the statewide increase of 5.2 percent, according to IAR. Didier believes that annual increases of 5 to 6 percent could become the norm.
Some areas of town, such as downtown and West Central, are outpacing the median growth in prices. Although there is a lot of new rental housing coming on line, homes offered for purchase in or near downtown are relatively rare and buyers have a harder time finding what they need, Didier said.
Many of the homes in West Central, for example, are on the small side. So finding one that is larger, and has been updated, is not an easy task.
“They’re increasing in value just because of sheer scarcity…they’re getting a premium,” he said.
Because of the cost of new construction, buyers also are looking more at older homes, which offer unique designs and more features for the price, Didier added. That doesn’t mean sellers can just throw an older home on the market, and expect to to sell quickly at or above their list price, without making some improvements first, however.
“Buyers want something that is move-in ready,” he said. “Every home that is ready that comes up on the market is selling within a day or two with multiple offers.”
The why of buy
Allen County ranks right in the middle of a list of 78 counties (out of 92) where it is less expensive to buy than rent.
A lot of millennials are making the jump from renting to buying, and they may account for as much as half of home purchases in 2017, Didier said.
Interest rates have begun to tick up, but Ward said she is not worried.
“Although every increase knocks some people out of the market, from what I am hearing, they’re not going to go up very fast or very high. It will be gradual enough that we will be able to absorb that interest rate increase,” she said.
The year got off to a fast start in January, helped by milder than usual weather, and some buyers may be moving more quickly to get in ahead of rate increases, she speculated.
“Every Realtor that I talk to has lots of prospects, new listings coming on the market, buyers that are expressing interest…so I actually anticipate that this year will be as good or better as last year,” Ward said.
Statewide, “closed transactions and home prices were better each month of 2016 than the year before, while the year as a whole topped the last two years,” said Shelbyville’s Nancy Smith, 2016 president of IAR.
The median home price rose to $139,900, and the percentage of original list price received rose 1 percentage point to 95.2 percent statewide, the IAR data showed.
In the 12-county are of northeast Indiana covered by Greater Fort Wayne Business Weekly, home prices rose most quickly in Noble County, up 15.2 percent, followed by Whitley at 12.7 percent and Steuben at 12.5 percent. The highest median prices were found in Steuben and Kosciusko counties, and the lowest were in Wabash.