The Indianapolis housing market is a dynamic and thriving real estate landscape, attracting both homebuyers and investors alike. As the capital city of Indiana and the 16th-most populous city in the U.S. (2020 Census), Indianapolis offers a diverse range of neighborhoods, excellent amenities, and a strong job market, making it a sought-after destination for those looking to settle down or invest in real estate.
Let us discuss the current state of the Indianapolis housing market, examining key factors such as home prices, trends, and the forecast. We'll explore the market conditions that are driving housing prices, analyze the latest trends shaping buyer and seller behavior, and provide insights into what the future holds for real estate in Indianapolis.
Current Indiana Housing Market Trends
The Indiana housing market in October 2023 reflects a delicate balance between increased inventory, stabilizing prices, and buyer activity. While challenges persist, including historically low new listings and the impact of mortgage rates, the market shows resilience and the potential for a positive trajectory in the coming months.
Overview:
In October 2023, the Indiana Association of REALTORS® (IAR) reported that while home sales remained 11% below 2022 levels, there was an uptick in buying activity due to rising inventory and slowing price gains.
Market Highlights:
- Year-to-Date Sales: October's 6,267 closed sales bring the 2023 year-to-date total to 64,856, 15% below 2022.
- Listings: Year-to-date listings are 79,800 through October, 13% below the first ten months of 2022.
- Price Trends: Homes sold for 96.1% of their original listing price in October.
- Affordability Impact: Sales below $250,000 declined 13% year-over-year due to higher mortgage rates impacting affordability.
- County Performances: St. Joseph and Allen counties outperformed the statewide trend, while Marion and Lake counties slightly fell behind.
- Regional Analysis: Central Indiana saw a 15% decline in sales behind October 2022, with a median sale price of $290,750.
Sales and Inventory:
In October, 6,267 home sales were closed, reflecting a 5% decrease from September and an 11% decline compared to the same period in 2022. However, the market saw 7,991 new listings, just 1% below 2022. The overall inventory increased to 12,935 homes listed on a given day through October.
The average time on market rose to thirteen days from listing to pending sale, indicating a more balanced market. The median sale price dropped to $240,000, down 1% from the previous year.
Pending Sales and Market Trends:
Pending sales in October reached 6,360, surpassing closed sales for the month. This suggests an optimistic outlook for November, defying the typical seasonal pattern. IAR President Lynn Wheeler noted that fall could be a great time for bargain-hunting homebuyers, but the impact of higher mortgage rates on budgets necessitates professional assistance in navigating the market.
Long-Term Perspective:
Wheeler emphasized the longer-term perspective on inventory trends, highlighting a six-month consecutive rise in supply, yet average daily listings remain significantly lower than pre-2020 levels. Limited inventory creates competition, keeping prices lower this fall but not dropping below 2022 levels. Half of all pending sales still happen within thirteen days, indicating a competitive market.
Seller Behavior and Mortgage Rates:
IAR CEO Mark Fisher expressed concern about historically low new listings in the past twelve months. Sellers are slow to enter the market despite high year-to-date prices and a brisk sales pace. Fisher stressed the need for falling mortgage rates to encourage more homeowners to list their properties and the necessity for new residential development to meet future demand.
Indianapolis Housing Market Trends
Marion County, located in the heart of Indiana, is home to the state capital, Indianapolis. According to the data released by the Indiana Association of REALTORS®, the Marion County housing market experienced notable changes in key metrics during October 2023.
New Listings:
In October 2023, Marion County saw a decline in new listings, recording 1,273 compared to 1,362 in the same period in 2022, marking a 6.5% decrease. The year-to-date new listings through October 2023 reached 13,135, reflecting a significant 15.6% decrease compared to the same period in 2022 (15,569).
Closed Sales:
Closed sales in October 2023 amounted to 961, a notable 10.7% decrease from the 1,076 closed sales in October 2022. The year-to-date closed sales through October 2023 totaled 10,418, indicating a significant 17.2% decline compared to the same period in 2022 (12,579).
Median Sales Price:
The median sales price in Marion County showed a slight increase from $230,000 in October 2022 to $231,000 in October 2023, representing a 0.4% change. The year-to-date median sales price through October 2023 rose from $235,000 in 2022 to $236,000, indicating a 0.4% increase.
Percent of Original List Price Received:
The percent of the original list price received remained consistent at 95.9% in October 2023, the same as October 2022. However, there was a slight decline in the year-to-date figure, dropping from 99.5% in 2022 to 96.8% in 2023, reflecting a 2.7% decrease.
Months Supply of Inventory:
The months supply of inventory in Marion County increased from 1.6 in October 2022 to 2.2 in October 2023, marking a substantial 37.5% rise. This metric provides insights into the balance between supply and demand in the housing market.
Inventory of Homes for Sale:
The inventory of homes for sale in Marion County saw growth, reaching 2,272 in October 2023 compared to 2,106 in October 2022, representing a 7.9% increase. This increase contributes to the overall supply available in the market.
Market Analysis:
The Marion County housing market in October 2023 reflects a mixed landscape. While there is a decrease in new listings and closed sales, the median sales price has shown resilience with a slight increase. The percent of the original list price received indicates a slight softening, and the months supply of inventory signals a shift in the balance between supply and demand.
The increased inventory of homes for sale suggests more options for buyers, potentially influencing the market dynamics in the coming months. However, the year-to-date figures highlight a significant decline in both new listings and closed sales, emphasizing challenges in the market that may require further analysis and strategic interventions.
Indianapolis Housing Market Forecast 2023-2024
What are the Indianapolis real estate market predictions? The Indianapolis-Carmel-Anderson housing market, as per Zillow's latest data through October 31, 2023, presents a snapshot of key indicators shaping the real estate landscape in the region. Understanding these metrics is crucial for prospective buyers, sellers, and industry stakeholders.
Current Market Statistics:
- Average Home Value: The average home value in Indianapolis-Carmel-Anderson stands at $269,284, reflecting a 1.9% increase over the past year.
- Days to Pending: Homes in this market typically go pending in around 10 days, emphasizing a swift pace of transactions.
Market Forecast:
- 1-Year Forecast: Zillow's market forecast for the next year indicates a modest growth of 0.6%, providing insights for those planning to enter the market in the coming months.
- For Sale Inventory: As of October 31, 2023, the market has 6,093 homes listed for sale, contributing to the overall supply available to potential buyers.
- New Listings: In October 2023, there were 2,607 new listings, adding to the inventory and potentially influencing market dynamics.
Price Dynamics:
- Median Sale to List Ratio: As of September 30, 2023, the median sale to list ratio is 0.998, providing insights into the relationship between listing prices and actual sale prices.
- Median Sale Price: The median sale price, as of September 30, 2023, is $263,750, reflecting the midpoint of home prices in the market.
- Median List Price: As of October 31, 2023, the median list price is $294,633, indicating the middle point of listed home prices in the current market.
Market Trends:
- Percent of Sales Over List Price: As of September 30, 2023, 30.6% of sales in the Indianapolis housing market are transacted over the list price, indicating a competitive environment.
- Percent of Sales Under List Price: During the same period, 47.3% of sales are recorded under the list price, showcasing diversity in pricing strategies.
Is It a Buyer's or Seller's Housing Market?
The Indianapolis housing market, with a swift pace of transactions and a significant percentage of sales over list price, leans towards a Seller's Market. Buyers should be prepared for competition and act promptly to secure desirable properties.
Are Home Prices Dropping in Indianapolis?
As of Zillow's latest data, home prices in Indianapolis-Carmel-Anderson have shown a 1.9% increase over the past year. There is no indication of a drop in home prices at present.
Will the Indianapolis Housing Market Crash?
Based on the current data and Zillow's 1-year forecast indicating a 0.6% growth, there is no immediate indication of a housing market crash. However, market conditions can change, and stakeholders should stay informed about future updates.
Indianapolis Real Estate Investment Overview
Now that you know where Indianapolis is, you probably want to know why we’re recommending it to real estate investors. When it comes down to the Indianapolis real estate market, it is considered to be an excellent destination for cash flow rental properties. There is a strong and steady year-over-year appreciation of Indianapolis investment properties. You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers.
Let’s talk a bit about Indianapolis before we discuss what lies ahead for investors and homebuyers. Indianapolis is also known as the crossroads of America with six interstate highways crossing through the town. However, the transport sector isn't the only thing the city is good for. Construction in Indianapolis seems to be a trend ever since 1849 with America's first Union Station. The construction companies have been stretching their profit margins from the ever-growing Indianapolis housing market.
Why should one invest in this hot market in the state of Indiana? Well, to begin with, Indianapolis has a record of being one of the best long-term real estate investments in the U.S. over the past 10 years. Over the last decade, the cumulative appreciation rate has been 92.94 percent, placing it in the top 30% nationally. This equates to an annual average house appreciation rate of 6.79 percent in Indianapolis, according to NeighborhoodScout data.
Why Is Indianapolis A Good Place For Real Estate Investment? |
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Let’s look at the state of the Indianapolis real estate market and the factors driving the market in the short and long term.
Indianapolis's Business-Friendly Economy
The circle city may be the 13th largest city in the nation but that doesn't stop it from carefully drawing out its budget to accommodate its locals. It's one of the few cities running on a surplus balanced budget making it favorable for most business investments. This is due to the low tax levied on business premises making it a viable option for the rental real estate business.
Indianapolis has the highest job growth in the midwest. It has seen a surge in the technology sector ushering in a new business climate for the city. In 2016, over 49 companies chose to expand their firms and relocate opening up branches in the area. This led to over 4,500 unemployment cases being eradicated contributing to the overall growth in the local economy. Low cases of unemployment are a great way of attracting new families moving into the area and another reason for real estate investment.
The state capital has been directed towards funding several diversified sectors including tourism. The city hosts major sporting events like the NCAA basketball championships, and the famous Indy Car Race which attracts huge crowds each year. The Indianapolis real estate market can thrive from this especially in the home rental business during such occasions. Other areas of diversification include pharmaceutical as well as retail and healthcare investments.
Indianapolis Has Affordable Cost of Living
Due to the nature of commerce heavily practiced in the area, it's the most affordable place to be. According to CNN Money, it boasts of an affordability score of approximately 96% with low mortgage rates surpassing Dayton Ohio following it closely. The Indianapolis real estate market has been considered to be among the most stable markets out there. This is due to the city's location. The mid-western city's distance from the coast makes its market much more reliable unlike cities like other cities based off the coast. Their markets change just as the seasons come and go.
Increasing Home Prices in Indianapolis
Probably one of the best news to an Indianapolis real estate market investor is to learn of the rise in home prices. Over the recent past, home values have shot up by over 18% percent with the median home value reaching about $217K, according to local real estate agents. Not only will an investor get his money's worth but also stretch out profit margins as time goes by. A wise investment usually quickly returns the capital pumped into it. Indianapolis realtors have confessed to closing the fastest deals of their lifetime. Properties sell quite fast as they are listed on the market. This is advantageous to an investor as worrying about marketing and advertising is completely done away with.
Rise in Population
The population density in Indianapolis is on the rise with a growth rate of 0.33% according to the latest census conducted. Demographics show that the rise saw up to a 3.9% growth rate of African Americans, replacing the non-Hispanic which accounted for a greater percentage of the population. This diversification is a culmination of the accepting nature of the locals towards people of all backgrounds living side by side and in need of new homes.
Indianapolis is One of The Best Downtowns
According to Forbes, Indianapolis is one of the USA's best downtowns. The Circle city is known for its urban design with several construction projects underway with more contracts generated than they are completed. Improved public spaces and conservation-minded avenues are the things for most parts of the town. For those with a keen eye for real estate investment, this could be a major influence over the Indianapolis real estate market. The average rent for a 1-bedroom apartment in Downtown Indianapolis, Indianapolis, IN is currently $1,455. This is a 1% increase compared to the previous year.
Indianapolis Rental Market Has High Demand
Indianapolis is a College Town with university students choosing to reside off-campus. Moreover, graduates tend to move to the immediate area while starting out creating a huge rental market. For Entrepreneurs, opening up shop also adds to the demand. The average rent for a 1-bedroom apartment in Indianapolis, IN is currently $1,065.
This is a 5% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Indianapolis decreased by -16% to $983. The average rent for a 1-bedroom apartment decreased by -4% to $1,065, and the average rent for a 2-bedroom apartment remained flat.
- The average rent for a 2-bedroom apartment in Indianapolis, IN is currently $1,295. This is a 6% increase compared to the previous year.
- The average rent for a 3-bedroom apartment in Indianapolis, IN is currently $1,499. This is a 3% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Indianapolis, IN is currently $1,795. This is a 6% decrease compared to the previous year.
Some of the best neighborhoods in or around Indianapolis, Indiana are Near Eastside, Far East Side, and South Broad Ripple. Home prices in Indianapolis are well below the national average for all cities and towns in the United States.
Highest Appreciating Indianapolis Neighborhoods Since 2000 (List by Neighborhoodscout)
- Near Northside
- Old Northside / Herron Morton
- Arsenal Heights West
- Ransom Place
- N Beville Ave / E St Clair St
- N Rural St / E 9th St
- Woodruff Place / Arsenal Heights
- Fletcher Place
- Fountain Square
- Fall Creek Place East
Indianapolis Turnkey Properties For Sale
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Indianapolis.
Consult with one of the investment counselors who can help build you a custom portfolio of Indianapolis turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Indianapolis, and have a 3-year appreciation forecast of 10.3%.
All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Indianapolis turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
References
Latest Market Data, Trends, and Statistics
https://www.indianarealtors.com/consumers/housing-data/
https://www.zillow.com/Indianapolis-In/home-values
https://www.neighborhoodscout.com/in/indianapolis/real-estate
https://www.realtor.com/realestateandhomes-search/Indianapolis_IN/overview
https://www.zumper.com/rent-research/indianapolis-in
Why Invest in Indianapolis Rental Market
http://www.cashflowdiaries.com/why-is-indianapolis-such-a-great-city-to-invest-in
https://www.threaltyinc.com/blog/2017/01 /04/why-invest-in-rental-properties-in-indianapolis-in
Best Neighborhoods in Indianapolis
https://www.niche.com/places-to-live/n/allisonville-indianapolis-in
