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. If you are looking at buying a house in Indianapolis as a potential investment in 2020, you must read until the end. Last year was a record-breaking year for the entire real estate market of Indiana. The statewide housing market data at the end of last December showed that sales price of homes increased for the 97th consecutive month.
The median sales price in Indiana saw a year-over-year increase of 9.7 percent to $170,000. Not surprising is the fact that Indianapolis house prices are also on the rise in the year 2020. Demand is still outpacing the supply, the new construction is slow, and competition for quality homes remains tough. 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.
Like most cities nationwide, Indianapolis has experienced real estate appreciation over the last couple of years. The real estate appreciation rate in Indianapolis in the last quarter was around 0.81%, which amounts to an annual rate of 3.3%. However, it is quite unclear whether the rate of appreciation would remain steady or not due to the short term effects of the ongoing pandemic. Economic uncertainty might hold back sales volume for a short period in 2020. Most housing analysts expect Indianapolis house prices to remain flat or drop by a small fraction for the remainder of the year 2020.
In this article, we shall discuss some more important reasons why you may still want to consider buying Indianapolis investment properties in 2020. You will get a fair amount of knowledge of the fundamentals of this hot real estate market. Please note that many variables can potentially impact the value of a home in Indianapolis (or any other market) and some of these variables are impossible to predict in advance.
Why Is Indianapolis A Good Place For Real Estate Investment?
Indianapolis Housing Market Trends & Statistics 2020
We shall now discuss some of the most recent housing trends in the Indianapolis area and compare it with the past couple of years. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, 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 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.
The median list price of all types of properties listed on MLS in Indianapolis is $175,000, which is an increase of 5% from April 2020. The median price of a typical 3/2 bedroom single-family home is around $269,000.
Indianapolis is the seat of Marion County. The latest Housing Market Report (Marion County) from the “Indiana Association of Realtors” shows that inventory remained very tight in March 2020. In March, Indianapolis & the entire of Marion County was a seller’s real estate market. The traditional year-over-year comparisons show how March 2020 compared to March 2019. The median sales price increased by 11.9% to $165,000. The total number of new listings went up by 6.7% and closed sales went up by 7.4%.
Here’s how March 2020 compared to March 2019:
- Median Sales Price increased by 8.7%.
- New Listings increased by 2.9%.
- Closed Sales increased by 4.2%.
- Months Supply of Housing Inventory decreased by 25%.
- Inventory of Homes for Sale decreased by 23.8%.
On Movoto.com, Indianapolis' current home resale inventory number is 1632, which decreased by 13 percent from a year ago. Compared to last month (April) the inventory has decreased by 6%. The median list price per square foot in Indianapolis is $103. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in May.
|Current||1 Month Ago||1 Year Ago|
|Median List Price||$229,900||$221,750+3%||$229,900|
|Median Days on Movoto||69||63+9%||50+38%|
|Median Home Size||2,024||1,995+1%||2,173-6%|
Market Snapshot Courtesy of Movoto.com
The ongoing pandemic has not impacted the real estate activity in the region by any significant measure. Real estate remains an essential business in Indiana and realtors have many tools to get their clients to the closing table in the time of the pandemic. It is impossible to predict how housing markets will perform over the next several months. The closing process is taking longer than usual due to safety precautions all over the country.
The pandemic, however, has not had any impact on Indianapolis home prices yet. Historically low-interest rates, tight inventory, and strong demand are continuing to favor sellers in the Indianapolis housing market.
Indianapolis Real Estate Market Forecast 2020 – 2021
What are the Indianapolis real estate market predictions? Indianapolis housing market 2020 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. The Indianapolis house prices remained flat for a short period between 2015 to 2016. Since 2016, the median home price in Indianapolis has appreciated by roughly 38% from 111,000 to $153,159.
Last year saw was the fourth consecutive year of home price gains. The median home value in Indianapolis (on Zillow) is $153,159, up by 5.4% from a year ago. According to Zillow’s statistics, currently, Indianapolis is a sizzling hot seller’s market. The latest Indianapolis real estate market forecast depicts a little cooling-off trend. The home prices are predicted to remain flat or may decrease by just 1% in the next twelve months. This is perhaps due to the short term impact of the coronavirus pandemic on real estate sales in the Indianapolis area.
Here is the Indianapolis, IN real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of -1.0% until March 2021.
Here is another short and crisp Indianapolis housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Indianapolis is 85% and it is predicting a positive trend. LittleBigHomes.com estimates that the probability of rising home prices in Indianapolis is 85% during this period. If this price forecast is correct, the Indianapolis home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Indianapolis Housing Market Forecast.
Indianapolis Real Estate – Indianapolis, IN Homes For Sale
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. At the national level, the single-family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single-family rental units. With 2020 being, theoretically, in the middle of a boom, there are still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
Currently, there are 1516 homes for sale in Indianapolis, IN on Zillow. Additionally, there are 922 homes for rent. Under potential listings, there are about 0 Foreclosed and 330 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
- The median list price per square foot in Indianapolis is $106, which is lower than the Indianapolis-Carmel-Anderson Metro average of $114.
- The median price of homes for sale is $169,900.
- The median rent price in Indianapolis is $1,000, which is lower than the Indianapolis-Carmel-Anderson Metro median of $1,175.
There are currently 4651 homes for sale and 1113 homes for rent in Indianapolis, IN on Realtor.com, a real estate listings website. The newly listed homes are 409. According to their statistics, in April 2020, the Indianapolis housing market was a seller’s market, which means there were roughly more buyers than there were active homes for sale. Demand outpaced the supply favoring sellers in the region.
Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Indianapolis have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 99.81% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher.
In April 2020, the median list price of homes in Indianapolis, IN was $189.9K, trending up 10.1% year-over-year. The median listing price per square foot was $99. The median sale price was $177K.
Indianapolis Real Estate Foreclosure Statistics
Here are some foreclosure statistics of the Indianapolis real estate market. As per the Indianapolis foreclosure data by Zillow, the percent of delinquent mortgages in Indianapolis is 1.6%, which is higher than the national value of 1.1%. There are currently 695 properties in Indianapolis, IN that are in some stage of foreclosure (default, auction or bank-owned) while the number of homes listed for sale on RealtyTrac is 1,998. In April 2020, the number of properties that received a foreclosure filing in Indianapolis, IN was 91% lower than the previous month and 93% lower than the same time last year.
|Potential Foreclosures in Indianapolis||695 (RealtyTrac)|
|Homes for Sale in Indianapolis||1998|
|Median List Price||$173,500 (5% rise vs Feb 2019)|
In Indianapolis, the zip code with the highest foreclosure rate is 46234, where 1 in every 5397 housing units is foreclosed. 46205 zip code has the lowest foreclosure rate, where 1 in every 14,138 housing units become delinquent.
Here is the current distribution of foreclosures based on the number of active foreclosure homes in Indianapolis, IN.
Indianapolis Real Estate Market: Is It A Good Place For Investment?
Now that you know where Indianapolis is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Should you consider Indianapolis real estate investment? Many real estate investors have asked themselves if buying an investment property in Indianapolis is a good investment?
You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020. 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.
Let’s look at the state of the Indianapolis real estate market and the factors driving the market in the short and long term.
1. 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.
2. Indianapolis' Stable Real Estate Market
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 it's market much reliable unlike cities like other cities based off the coast. Their markets change just as the seasons come and go.
3. 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.
4. Diversification of State Capital and its Effects
The state capital has been directed towards funding a number of 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.
5. 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 with over 7% percent with the median home value averaged at about $125,736 according to real estate agents. Not only will an investor get his money's worth but also stretch out profit margins as time goes by.
6. 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.
7. Indianapolis Has Highest Job Growth in The Midwest
Indianapolis 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 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.
8. 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 in real estate investment, this could be a major influence over the Indianapolis real estate market.
9. Properties Sell Fast on Market
A wise investment is usually that 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 Indianapolis real estate market. This is advantageous to an investor as worrying about marketing and advertising is completely done away with.
10. 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.
Indianapolis Real Estate Investment: Best 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 which 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.
Here is a snapshot that shows the median home values in some of the popular neighborhoods of Indianapolis.
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 #1 in the best neighborhoods to live in the Indianapolis area. The area is suburban with a total population of 4,864. 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||$208,429|
|Median Rent in Glendale||$682|
2. North Central, Indianapolis
North Central is #2 in 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||$208,284|
|Median Rent in North Central||$1,475|
3. Broad Ripple Village, Indianapolis
Broad Ripple Village is #3 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 7,949.
|Median Home Value in Broad Ripple Village||$204,941|
|Median Rent in Broad Ripple Village||$1,000|
4. Delaware Trails, Indianapolis
Delaware Trails is #4 in the best neighborhoods to live in the Indianapolis area. It is a suburban area with a population of 8,372.
|Median Home Value in Delaware Trails||$197,074|
|Median Rent in Delaware Trails||$876|
5. Allisonville, Indianapolis
Allisonville is #5 in the best neighborhoods to live in the Indianapolis area. The area is suburban with a population of 14,185. Currently, Zillow has 27 homes for sale and 11 homes for rent in Allisonville Indianapolis.
|Median Home Value in Allisonville||$199,287|
|Median Rent in Allisonville||$864|
6. Butler-Tarkington, Indianapolis
Butler Tarkington is #6 in the best neighborhoods to live in the Indianapolis area. Butler Tarkington is a neighborhood on the north side of Indianapolis with the following borders: 38th Street and Crown Hill Cemetery to the south, the Central Canal, and Westfield Boulevard to the north, Michigan Road to the west, and Meridian Street to the east. It is an urban area with a population of 15,164. The neighborhood's name comes from Butler University and the famous writer Booth Tarkington.
|Median Home Value in Butler-Tarkington||$237,756|
|Median Rent in Butler-Tarkington||$974|
Indianapolis Turnkey Properties For Sale
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.
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.
Indianapolis | Neighboring Real Estate Investment Opportunities
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 a number of 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 in 2020!
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, the 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