2022 Greater Lafayette Housing Market Recap

You’ve seen the headlines . . . home prices are skyrocketing, mortgage rates are going up, housing supply is increasing, home prices will stagnate, yadda yadda yadda. What’s true?

Let’s start with real estate rule number one: All real estate is LOCAL.

Yeah, I’m sure you heard your Great Aunt Sally talking about what’s happening in Sheboygan while you were enjoying Christmas dinner in Romney . . . but those two markets are not equal.

Jay Thompson, Real Estate Industry Consultant, explains: Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.

A trusted, LOCAL expert is your best resource, not talking heads and clickbait headlines, which can cause fear and uncertainty! Your local area may or may not follow the national trends.

So, let’s talk about the market here in Tippecanoe County. We started off 2022 with a bang, thanks to built-up pandemic demand and low interest rates. The market remained fiery hot throughout the year, with almost 25% of sold homes going under contract in 24 hours or less on the market.

Then, things got interesting this fall when interest rates skyrocketed. According to Freddie Mac, the average 30-year mortgage rate jumped from 3.22% in January to a high of 7.08% in October. That’s an increase of nearly 4% in ten months, which is a historical mindblower in terms of rate increase acceleration. This definitely had an effect on days on market as buyers paused to reevaluate their home-buying needs thanks to reduced buying power.

Here’s how we ended the year in Tippecanoe County, Indiana:*

• Homes sold: 2166
• Sales price: $20,000 to $1.325 million
• Average sales price: $276,398
• Average DOM: 15
• Homes with ZERO DOM: 206 (about 10%)
• Homes sold in 24 hours or fewer: 517 (about 24%)
• Currently active: 138

What do we want in 2023? Stability! Hopefully the Fed will bring inflation down and keep it there. Experts agree that if inflation is high, mortgage rates will be, too. But if inflation continues to fall, mortgage rates will likely respond. For now, we’ve got a ways to go. Some experts are predicting we’ll be back under 6% by the third quarter!

When it comes to home prices, Economics 101 will always play the leading role: supply vs. demand. The more buyers and fewer homes, the more prices will rise. Exhibit: pandemic. While some experts think home values will go up, others are anticipating that they’ll go down. The truth is probably somewhere in the middle. Nationally, the experts are predicting relatively flat or neutral appreciation in 2023.

So, here’s the deal. You need a local expert . . . someone who can discuss local banks and lending options, as well as local housing trends. Lean on a trusted real estate adviser who lives and breathes real estate. I’m the #5 broker in the Lafayette Regional Association of Realtors, and I represent the highest average sales price of the top five. I love what I do, and I’m here to help you reach your real estate goals.

Let’s connect!

*stats per the IRMLS as of 1/2/23