NOTE: Tables are available showing complete data for most regions in the state and contact information for local Board of Realtors presidents. A full report is available from our office upon request.

FIRST QUARTER 1997 HOME PRICES IN INDIANA ROSE BY 3.6 PERCENT; AFFORDABILITY DECLINES SLIGHTLY

BLOOMINGTON, Ind. -- Home prices for five counties near Cincinnati reported a 27 percent increase in their median home price for the first quarter of this year, which may be an indication of that city's continued suburban growth into Indiana, according to figures released today (Aug. 14) by the Indiana University Center for Real Estate Studies and the Indiana Association of Realtors.

Indiana's statewide median home price rose by just 3.6 percent during the first three months of 1997 -- a small increase when compared to a national jump of 14.3 percent a year ago

The median home price for the state during the first quarter was $85,000, up from $82,000 a year earlier and up from $83,900 in the fourth quarter of 1996. The national median home price rose from $107,000 to $122,300 over the year.

Other areas in Indiana posting double-digit increases from the first quarter 1996 were Johnson County, where the home price was up by 18.8 percent; Michigan City, 18.6 percent; Northeast Indiana, 18.0 percent; Jasper, 17.5 percent; and Shelby County, 13.3 percent.

The region near Cincinnati that experienced the greatest increase included the counties of Dearborn, Decatur, Franklin, Ohio and Ripley.

Traditionally, Indiana's increases in home prices have outpaced those of the nation, and the new data may be simply an anomaly, said Jeffrey D. Fisher, director of the IU Center for Real Estate Studies.

Fisher pointed to national statistics for May that show a year-to-year increase then of only 4.4 percent. He advises Indiana homeowners not to be concerned about the first quarter results, since they show state home values to be increasing faster than the rate of inflation.

"When I first looked at this, I was a little surprised," Fisher acknowledged. "But the national numbers that have come out since then have shown a better picture of what's happening at the national level.

"I would expect the increase in Indiana in the next quarter to certainly be on par with that of the nation and perhaps slightly ahead," he added. "Then again, the nation is being influenced by areas that really took a dive several years ago."

Fisher is referring to areas such as the Northeast, California and Texas, where property and home values experienced unsustainable roller-coaster-like increases and then plummeted. By contrast, the Indiana housing market has been marked by stable, reasonable increases throughout the last two decades.

Indiana's housing affordability index in the first quarter of 1997 fell slightly from 184 a year ago to 181. But housing remains far more affordable in Indiana than the rest of the nation -- the national HAI also dropped, from 125 to 118.

At an index of 181, a family with the median income of $42,108 can afford to purchase a home costing $153,850, or 81 percent more than the median-priced home. The HAI is calculated assuming an 80 percent mortgage and is based on requirements of the Federal National Mortgage Association, which limits loan payments to 25 percent of income.

The first-time home buyers index fell slightly to 129 in the first quarter from 130 a year earlier. The affordability gap between first-time home buyers and home buyers overall was 52 percent in Indiana.

During the first quarter, data was collected on 7,967 single-family home sales throughout Indiana. The dollar value of these sales was $784.3 million. Interest rates averaged 7.69 percent for the quarter.

The state's increase in median home prices was a statewide phenomenon. Out of 22 major cities and regions studied in depth, 17 experienced gains, and three of the cities that experienced decreases were concentrated in central Indiana: Anderson, Kokomo and Marion. The others were Evansville and Warsaw-Kosciusko County.

Overall, the Indianapolis metropolitan area had a 5.2 percent increase in its median home price, which was $101,364 in the first quarter. Nearly all of the counties in the Indianapolis metropolitan statistical area posted increases of varying percentages. Boone County's median home price fell by 4.2 percent, while Shelby County's price rose by 13.3 percent and Johnson County by 18.8 percent. Other counties in the Indianapolis MSA had increases ranging from 1.4 percent to 5.2 percent.

Hamilton County continued to have the highest median home price in the state, at $147,500, and Miami County had the lowest, at $35,500.

Fisher said several areas in the state posting gains were areas in which people were buying more expensive homes. "You have to remember that the statistics we have are what the median home sold for, which means that if people are buying newer or larger homes, the median home price will increase," he said.

The first-quarter median home prices and HAIs for the 20 regions in the state were: Greater Northwest Indiana, $97,000, 170; Michigan City-LaPorte, $80,500, 184; South Bend-Mishawaka, $71,000, 218; Elkhart-Goshen, $81,000, 199; Fort Wayne and region, $83,000, 199; Lafayette, $100,000, 157; Kokomo, $67,500, 243; Marion, $51,625, 273; Anderson, $66,000, 223; Muncie, $63,250; 226; Terre Haute-Vincennes and region, $58,000, 224; Indianapolis and region, $101,364, 174; Bloomington, $110,000, 135; Columbus, $109,900, 154; Southeast Indiana, $108,000, 133; Evansville, $70,125, 213; Jasper area, $67,000, 242; Northeast Indiana, $78,500, 193; Warsaw-Kosciusko County, $80,350, 194; and Richmond, $65,000, 204.

The center calculated separate first-quarter median home prices and HAIs for these other counties: Brown, $105,000, 147; Cass, $50,000, 278; Fayette, $62,500, 207; Fulton, $70,000, 191; Greene, $47,000, 262; Henry, $65,000, 212; Huntington, $59,250, 246; Lawrence, $69,900, 191; Marshall, $71,000, 207; Miami, $35,500, 357; Montgomery, $68,000, 211; Washington, $48,950, 254; and White, $72,000, 192.

In the Indianapolis metro area: Boone, $118,500, 158; Hamilton, $147,500, 178; Hancock, $109,200, 169; Hendricks, $119,900, 159; Johnson, $108,000, 169; Marion, $89,000, 178; Morgan, $90,900, 179; and Shelby, $82,700, 182.

Median home prices are revised quarterly as additional data becomes available. National figures are provided by the National Association of Realtors.

For more information, contact George Vlahakis, 812-855-0846 or 812-855-3911, gvlahaki@indiana.edu