Market Conditions -
As the Dow Jones Industrial Average set records this month in both record levels as well as consecutive gains, the US & local Indianapolis housing market also rallied in many different ways. For February 2013, the number of homes for sale is down 11% from February of 2012. My interpretation is that there are 2 different forces at work here: 1) There are far fewer panic sellers now than in from 2008 - 2010, as jobs stabilize and easier refinancing options allow more Hoosiers to stay in their homes and 2) Increased job creation along with other positive economic indicators (including historically low interest rates) are increasing the number of buyers in the market.
The number of homes that went under contract in February of 2013 compared to February of 2012 was up 10%. Both trends are setting records as the year over year measurements of the number of homes for sale has decreased while the number of homes going under contract has increased consecutively for more than 12 straight months. Either trend is welcomed news, but both together are a sign that the local housing market is stabilizing, not favoring sellers or buyers to heavily. The same observations can be made in many other US markets and across the US as a whole.
When housing inventory is leaner and the number of buyers is higher, prices will rise, and that they have done. Year over year in February, the average price of sold homes rose by 6.5%, a trend that is also on a consecutive streak. All of this good for homeowners and buyers alike, but this is also good for borrowers who are looking to refinance at today's low interest rates, as appraisals are supporting property values.