Last year was a record-breaking year for the entire Indiana real estate market. Not surprising is the fact that Indianapolis house prices are also on the rise. Demand is still outpacing the supply, the new construction is slow, and competition for quality homes remains tough. The lack of available inventory in local housing markets across Indiana has remained the dominant storyline for the past several years. Due to the pandemic, the housing market in Indiana is experiencing an “unprecedented” boom.
Because of strong buyer demand, fueled by low mortgage rates, prices rose steadily last year, making it an excellent time to be a seller or current homeowner. Currently, sellers are in the driver’s seat, but by the end of 2022, they may not experience the same profit gains or several bids they are accustomed to. The inventory is still very low despite the fact that listings have increased in a few locations. At the end of March, there were less than half as many properties for sale as there were two years prior, according to the Indiana Association of REALTORS®.
Indian Housing Market Report (Statewide)
Other year-over-year comparisons for the Indiana housing market (March 2022 – Latest Statewide):
- Closed sales decreased 6.5% to 6,715.
- YTD closed sales decreased 1.3% to 18,115.
- Median sales price increased 17.3% to $$224,000.
- YTD median sales price increased 15.5% to $$216,000.
- New listings increased 6.6% to 9,262 units for sale.
- YTD new listings increased 6.7% to 21,914 units for sale.
- Months Supply of Housing Inventory remained unchanged at 0.7 months.
Indianapolis Housing Market Prices & Forecast 2022-2023
We shall now discuss some of the most recent housing trends in the Indianapolis area and compare them with the past year. We shall mainly discuss median home prices, inventory, and growth, which will help you understand the way the local real estate market moves in this region. Indianapolis has been one of the hottest real estate markets in the country for many years. Indianapolis housing market has a mixture of owner-occupied and renter-occupied units.
As per Neigborhoodscout.com, a real estate data provider, three and four-bedroom single-family detached homes are the most common housing units in Indianapolis. Other types of housing that are prevalent in Indianapolis include duplexes, rowhouses, and homes converted to apartments. Indianapolis single-family homes account for 59% of the city’s housing units.
Indianapolis (Marion County) is currently a hot seller’s real estate market – which means that the demand from buyers is exceeding the current supply of homes for sale. The pricing of homes is trending higher and is more attractive for sellers in the current phase. The shortage of supply and an increase in the demand for housing will push the prices higher in the Indianapolis housing market. While an increase in housing prices is beneficial for homeowners, it is not always beneficial for homebuyers.
According to Realtor.com, in April 2022, the median list price of homes in Indianapolis, IN was $229K, trending up 17.5% year-over-year. The median listing price per square foot was $127. There are 105 neighborhoods in Indianapolis. Near Northside has a median listing price of $420,000, making it the most expensive neighborhood. Near Westside is the most affordable neighborhood, with a median listing price of $117,500.
Indianapolis is the seat of Marion County. The latest Housing Market Report (Marion County) from the “Indiana Association of Realtors” shows that inventory remained tight in April 2022. The supply of homes has not increased in tandem with the surge in demand, resulting in continued upward pressure on home prices. Indianapolis & the entire of Marion County is a seller’s real estate market. The year-over-year comparisons illustrate how April 2022 compared to April 2021.
- Median Sales Price increased by 16.5% to $233,000 in April 2022.
- Percent of Original List Price Received increased by 2% to 101.8%.
- New Listings decreased by 13% to 1,656 units for sale.
- Closed Sales decreased by 7.6% to 1,309 units.
- Months Supply of Housing Inventory decreased by 22.2% to 0.7 months.
- Inventory of Homes for Sale decreased by 21.9% to 927 units for sale on MLS.
Indianapolis Real Estate Market Forecast
What are the Indianapolis real estate market predictions? Indianapolis housing market is shaping up to continue the trend of the last few years as one of the hottest markets in the nation. Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years. Since the last decade (June 2012), the typical home price in Indianapolis has appreciated by roughly 124.7% (Zillow Home Value Index).
The typical home value in Indianapolis is currently $223,826, up by 19.9% from a year ago. Indianapolis is a seller’s market as there exists a limited supply of homes, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers. In other words, based on the month’s supply of inventory, the demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations.
There are fewer homes for sale than there are active buyers in the marketplace. Like most cities nationwide, Indianapolis has experienced real estate appreciation over the last couple of years. According to NeighborhoodScout, the real estate appreciation rate in Indianapolis in the last quarter was around 7.58%, which amounts to an annual rate of 33.97%. During the latest twelve months, Indianapolis’s appreciation rate was 19.73%.
- The typical home value of homes in Indianapolis-Carmel-Anderson Metro is $266,890, up 20.3% over the past year.
- Zillow predicts they may rise by 10.7% by May 2023 (ZHVI, smoothed and seasonally adjusted).
- Indianapolis home values have gone up 19.9% over the past year and will continue to rise in the next twelve months.
- Marion County home values have gone up 19.9% over the past year and will continue to rise in the next twelve months.
Here is the Indianapolis real estate price appreciation graph by Zillow since 2012.
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 in 2022.
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 81.56 percent, placing it in the top 30% nationally. This equates to an annual average house appreciation rate of 6.15 percent in Indianapolis, according to NeighborhoodScout data.
If you are looking at buying a house in Indianapolis as a potential investment in 2022 & 2023, you must read it until the end. Although this article alone is not a comprehensive source to make a final investment decision for Indianapolis, we have collected ten evidence-based positive things for investors who are keen to buy an investment property in Indianapolis.
Why Is Indianapolis A Good Place For Real Estate Investment?
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. In fact, 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, 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 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 in thing 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 in the immediate area while starting out creating a huge rental market. For the Entrepreneurs, opening up shop also adds to the demand. The average rent for a 1-bedroom apartment in Indianapolis, IN is currently $1,055. This is a 17% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Indianapolis increased by 8% to $1,040. The average rent for a 1-bedroom apartment increased by 11% to $1,055, and the average rent for a 2-bedroom apartment increased by 10% to $1,205.
- The average rent for a 2-bedroom apartment in Indianapolis, IN is currently $1,205. This is a 22% increase compared to the previous year.
- The average rent for a 3-bedroom apartment in Indianapolis, IN is currently $1,475. This is a 6% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Indianapolis, IN is currently $1,695. No increase compared to the previous year.
Best Indianapolis Neighborhoods To Buy Investment Properties
Are you considering Indianapolis real estate investment? Maybe you have done a bit of real estate investing in Indianapolis but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Indianapolis offers great opportunities for turnkey real estate investments.
This is especially true for investors who want to invest in the market which is ranked the #1 most affordable place to own real estate (Forbes Magazine). In the Indianapolis real estate market, it is still possible to purchase cash flow turnkey properties that are up to 10% below market value – which means you get the best returns on your investment.
Good cash flow from Indianapolis investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Indianapolis in a growing neighborhood would be key to your success. If you invest wisely in Indianapolis’s real estate, you could secure your future.
The less expensive the Indianapolis investment property is, the lower your ongoing expenses will be. As with any real estate purchase, act wisely. Evaluate the specifics of the Indianapolis housing market at the time you intend to purchase. When looking for the best real estate investments in Indianapolis, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.
There are 127 neighborhoods in Indianapolis. 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. Near Northside has a median listing price of $319.9K, making it the most expensive neighborhood. Near Northwest is the most affordable neighborhood in Indianapolis, with a median listing price of $41,900.
There are some great neighborhoods in Indianapolis where you can consider buying investment properties. Here is the list of some of the best neighborhoods in Indianapolis for real estate investment (Data by Niche.com).
1. Glendale, Indianapolis
According to Niche.com, Glendale is one of the best neighborhoods to live in the Indianapolis area. The area is suburban with a total population of 5,334. Glendale is a neighborhood located on the north side of Indianapolis, located immediately east of Broad Ripple. Glendale is one of the oldest suburban neighborhoods in Indianapolis and is fairly residential in nature, despite being a heavy commercial district. It is best known as the home of Glendale Town Center.
|Median Home Value in Glendale||$226,636|
|Median Rent in Glendale||$829|
2. North Central, Indianapolis
North Central is one of the best neighborhoods to live in the Indianapolis area. It is a suburban area with a population of 8,012.
|Median Home Value in North Central||$335,299|
|Median Rent in North Central||$1,646|
3. Broad Ripple Village, Indianapolis
Broad Ripple Village is currently #1 in the best neighborhoods to live in the Indianapolis area. It is one of seven areas designated as cultural districts in Indianapolis, Indiana. Located about six miles (11 km) north of Downtown Indianapolis, Broad Ripple was established in 1837 as an independent municipality and annexed by the city of Indianapolis in 1922. Broad Ripple High School, one of the earliest Indianapolis Public Schools, is located within the Village. The area is suburban with a population of 8,100.
|Median Home Value in Broad Ripple Village||$229,537|
|Median Rent in Broad Ripple Village||$1,318|
4. Delaware Trails, Indianapolis
Delaware Trails is another best neighborhood to live in the Indianapolis area. It is a suburban area with a population of 9,111.
|Median Home Value in Delaware Trails||$198,801|
|Median Rent in Delaware Trails||$914|
5. Allisonville, Indianapolis
Allisonville is another best neighborhood to live in the Indianapolis area. The area is suburban with a population of 14,124. Allisonville residents enjoy a dense suburban feel, with the majority of residents owning their homes. There are numerous bars, restaurants, coffee shops, and parks in Allisonville. Allisonville is home to a large number of families and young professionals, and residents generally hold moderate political views. Allisonville’s public schools are highly regarded.
|Median Home Value in Allisonville||$253,858|
|Median Rent in Allisonville||$937|
6. Millersville, Indianapolis
Millersville is an Indianapolis neighborhood with a population of 10,794. Millersville is located in Marion County and is considered to be one of the best places to live in the state of Indiana. Millersville provides residents with a dense suburban feel, and the majority of residents own their homes. There are numerous bars, restaurants, coffee shops, and parks in Millersville. Millersville is home to a large number of young professionals and residents who lean liberal. Millersville’s public schools are highly regarded.
|Median Home Value in Butler-Tarkington||$165,951|
|Median Rent in Butler-Tarkington||$1,039|
7. Highest Appreciating Indianapolis Neighborhoods Since 2000 (List by Neighborhoodscout)
- Near Northside
- Old Northside / Herron Morton
- Arsenal Heights West
- Ransom Place
- Near Southside
- Fall Creek Place East
- Meridian Kessler South
- Fall Creek
- Fall Creek Place
- N Beville Ave / E St Clair St
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.
On the west of Indiana lies the state of Illinois. In Illinois, Chicago is a hot and sizzling real estate market. Chicago’s real estate market has been one of the slowest to recover since the housing bubble burst at the start of the Great Recession. Home prices were 19% below their pre-crash levels in 2017, and they aren’t expected to hit peak values until 2021. Chicago is not only home to several corporate headquarters; there has been a recent trend of companies moving their headquarters to Chicago as well.
The steady increase in jobs has contributed to a slow but steady increase in rents. Many businesses are attracted by Chicago’s labor pool, the largest in the nation. As these businesses move into the area and attract relocating professionals, many are forced to rent because they can’t find houses fast enough in the areas they want to live or simply choose to rent upon relocation in one of the luxury apartments downtown.
On the east of Indiana lies the state of Ohio. In Ohio, we recommend Cleveland for real estate investment. Cleveland’s population is stable at around 400,000 residents. It is doing a decent job of retaining its young people. Why is that something to bring up when discussing the Cleveland housing market? Because it is right next to Detroit, a city that has been shedding people for decades. The Cleveland real estate market is thus bolstered by steady to slow growth, though specific neighborhoods are seeing spikes in their valuations as new employers and attractions move in.
Another good real estate market is in the city of Akron, Ohio. Akron has been known as the “Rubber Capital of the World” for more than a century. It is home to around 200,000 people. However, the Akron real estate market is much larger than this. Include the suburbs and small towns that surround it, and its real estate market contains roughly 700,000 people. The Akron real estate market is notable for having an affordable multi-family market. Townhomes and condos start at 30K for a one-bedroom and hover around 30K per bedroom.
This is why a five-bedroom townhome costs around 150,000 dollars. A duplex with two four-bedroom units could be purchased for around 100-300,000 dollars, depending on the neighborhood. Five and six-bedroom properties can be found in the multi-unit market, too. Large duplexes and triplexes with this many bedrooms are perfect for families with many children as well as inter-generational households.
Let us know which real estate markets you consider best for real estate investing!
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Latest Market Data, Trends, and Statistics
Why Invest in Indianapolis Rental Market
Best Neighborhoods in Indianapolis