Experts say Region’s affordability, quality of life keep residential real estate strong
The future of Region home sales is incredibly optimistic, according to the experts.
The number of homes purchased in Northwest Indiana increased last year, data shows.
Bryan Traylor, senior vice president of residential lending at Merrillville-based Centier Bank, said there is a growing trend of people moving out of urban settings and into smaller communities for better quality of life. That trend is especially true as many companies learned during the pandemic that workers can be as productive at home as in an office.
“We’ve seen a huge uptick in the last couple years of people coming from Illinois and moving to Indiana,” Traylor said. “Especially in 2020, when people started realizing that, ‘Hey, my job might be in Chicago, but I really don’t need to be there every day. I can work remotely, so I can cross that border into Indiana and have a little bit lower cost of living and definitely more affordable housing and have a better overall work-life balance.’”
The Greater Northwest Indiana Association of Realtors, citing data from the Indiana Association of Realtors, reported there were 11,672 closed sales of existing homes in its service area, which includes Jasper, Lake, La Porte, Newton, Porter, Pulaski and Starke counties in 2020, a 10% increase from 10,608 closed sales in 2019.
The year-to-date median sales price for the Region in December was $193,000, up 9.3% from $176,500 a year earlier, the Realtor’s group reported. In 2020, sellers received 96.7% of list price, up 1% when compared to 2019.
Peter Novak, the CEO of the Greater Northwest Indiana Association of Realtors, said there are numerous reasons home sales increased toward the end of 2020.
“We already know homebuyers are coming from Illinois to Indiana, and absolutely, Chicago has everything to do with that,” Novak said. “Even before the commuter rail, we have a ton of people who live in Northwest Indiana who are commuting back not only to downtown Chicago but to other parts of Illinois as well for jobs.”
Brian Gill, senior vice president and chief retail lending officer at Munster-based Peoples Bank, said communities in the area have always been a draw for prospective buyers.
“Lower taxes have always been (a) nice selling point for the Region,” Gill said in an email. “It is a big-ticket item that is easily marketed to our neighbors to the west, (and) the communities that make up the Region have done a real nice job in developing quality-of-life amenities that will help sustain strong home sales over the next few years.”
Gill said lifestyle centers, walking trails, athletic facilities, youth organizations and many other amenities attract perspective buyers to communities in Northwest Indiana.
As the number of people buying homes grows, passenger rail improvements might spark even more demand.
The West Lake Corridor project, which includes a 9-mile rail extension beginning in Hammond, passing through Munster and ending in Dyer, already has lured new development to the Region.
“We are part of the National Association of Realtors, and they’ve done some studies on transit-oriented development, and the findings, at least the way I understand them, there does show a correlation to transit-oriented development and an increase in home values,” Novak said. “So, I think that’s something we certainly view as a positive.”
Region transportation leaders have said the West Lake project and the South Shore Line double-track project, which calls for adding a second rail line and other improvements to an existing service between Gary and Michigan City, could attract up to $2.3 billion in private investment to Northwest Indiana and bring 6,000 new jobs and $3 billion in economic impact by 2048.
Northwest Indiana has seen positive appreciation for homeowners the last few years, too, Traylor said, noting that, as the demand for homes increases, so do the prices and the number of homes being built.
“The biggest issue that people are going to have is that, as soon as a home is listed, it sells,” Traylor said. “If it’s reasonably priced, or even a little above market, it sells quickly because there’s just such a lack of inventory right now.
“Not only are you going to see increased prices and increased demand continue, but you’re also going to see a lot more homes being built just to satisfy that demand.”
Jamie Sulcer, immediate past president of the NWI Home Builders Association and Chicago Title sales manager, said houses are going on the market and being swept up immediately.
As homes sell quickly, Sulcer said the area is looking at an influx of jobs, such as builders and developers, to create more homes.
“Since we do have that lack of inventory, it really has opened up a whole new realm for the builders, for them to find lots that they can build on, have spec homes that they’re selling even before completion, and new developers coming in and putting up hundreds of homes a year,” Sulcer said.
People come into Northwest Indiana from a plethora of locations, not just Illinois, Sulcer said. Business owners often move to the area because the Region is a central location near highways, and because the area and the tax rates are business friendly.
“We have great opportunities, because we do still have available land that’s affordable,” Sulcer said. “We’re fortunate because housing has been strong, and housing prices have (gone) up, so when they’re selling, they’re getting top dollar, but of course, when they’re buying, they’re paying top dollar.”
Additionally, many people looking to get away from urban areas have moved or plan to move to the Northwest Indiana area to decrease their property taxes, even if they continue working in the city, he said.
With current train stations in the area and improvements to Region rail service underway, Traylor said it is becoming easier for people to get to where they need to go.
“It’s only making things more and more accessible,” Traylor said. “I think that’s definitely a contributing factor, (and) it’s just so much easier to get to and from downtown Chicago now than ever, and the fact that people aren’t having to go every day.”
Novak, too, said the enhanced rail development in the Region has “absolutely” contributed to the rising home sales across the area. Novak said, as commuting to Chicago becomes easier, the Region can expect an influx of people purchasing residential homes in the area, a number that already has been climbing for the past few years.
Novak said additional developments around the rail developments, including walkable areas and diversity of housing offered in the Region, also can increase home sales.
“We’ve always been supportive of that type of development in Northwest Indiana,” Novak said. “It’s tying us to Chicago; it’s tying us to obviously a world-class business economy, and it’s jobs for us, as well.”
As many people still commute to Chicago and other areas away from Northwest Indiana, Novak said additional access to getting around will only continue to benefit the community.
“Of course, from our perspective, we want to capitalize on that as best as possible, and this is one opportunity to do that,” he said.
“Obviously, the train getting people to Chicago, that’s going to be first and foremost, greater access to jobs, but purely from just a residential home sales standpoint, our hope is that we’ll start to see these types of developments occur in opportune places along the rail line that I would imagine absolutely they would appeal to home buyers out of Illinois.”
New construction boom
Jack Slager, development manager at Schilling Development in St. John, also has seen a steady rise in home sales in the Region, even before the announcement of the rail development in the Dyer and St. John area.
“It’s continuing, and it will continue to increase,” Slager said.
“I think people are catching onto that, and it’s just an added bonus for somebody who is looking to get out of Chicago.”
He said Schilling Development had not marketed the rail line previously, mostly because they were unsure if the plans were concrete, but now that the project has moved forward, they have begun to use it as a selling point with potential buyers.
Slager said in recent months, prospective home buyers have been contacting his company, asking about proximity of Schilling residential projects to future new Region train stations.
“We are starting to use it as a marketing tool, where realistically, our St. John developments are 15 minutes from a potential train station,” he said.
St. John would be positioned well for a potential new development, he said, but that’s not the only reason home sales have increased.
In fact, the steady incline began before the rail project started getting more traction in the news, he said.
“A majority of our developments are in St. John along the state line,” Slager said. “So, we started to see an increase of Illinois interest and Illinois buyers last year already.”
As the years go on, Traylor said Northwest Indiana can expect to continue seeing an upward trend in home buying in the area.
“There truly is a huge demand for homes right now,” Traylor said. “The future for Indiana, Northern Indiana home sales is very bright.”
Click here to read more from the April / May 2021 issue of Northwest Indiana Business Magazine.