2011was a challenge for the real estate market in Muncie and Delaware Co., IN. Terrible weather depressed business in the first quarter of the year. Second quarter results were also quite disappointing with nearly every measurement at or near all-time lows. However, there was a turn-around in the third quarter with overall sales better than the same period in the previous year for the first time in 12 months and we ended the year with 836 homes sold, down 6% from 2010.
Repos remained steady 
at about 29% of sales, averaging around $33,000 each. 80% of the repos were sold for cash indicating they are being bought by investors. Since most of these units are below $40,000 threshold being required by lenders, buyers are having difficulty obtaining financing unless they have large downpayments. This will further delay the absorbtion and depress the prices of this segment of the market. On the plus side, this will mean continued opportunites for investors with cash.
The overall inventory of homes for sale in Del. Co. remains low for this time of year and at 2011 sales levels there is just over 6 months supply at $75,000 and below ranging up to a 13.5 month supply of homes over $300,000. Altogether, we have just under an 8 month supply. More high-priced homes were sold in 2011 and overall sale prices moved up 1%, the first annual increase since 2008.
2012 looks to be a little brighter year. Interest rates remain at all-time lows and seem likely to continue at present levels at least throughout the first half. There is a continued lack of new construction so existing inventory should be absorbed at a greater rate and prices should hold. The property tax caps enacted by the legislature three years ago seem to be working and assessment values appear to be following sale prices as intended. We still have a "lack of confidence" mode and buyers will remain hesitant to commit until there is an increase in positive economic news, both locally and nationally. 2012 is a state and national election year with all the mixed messages that creates, so I doubt there will be any confidence-builders coming from the public sector. For 2012 in general, I expect unit sales here in our area to increase around 8% and for prices to gain modestly ending the year up 1%.
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