The lack of available inventory in the Indiana housing markets has remained the dominant storyline for the past several years. Due to the pandemic, the housing market in Indiana is experiencing an “unprecedented” boom. Given the increased mortgage rates, fewer buyers entered the market in November 2022. Despite the hard climate, Indiana's housing sector continues to outpace the U.S.
Since the beginning of June, home sales across Indiana have declined 12 percent below 2021 through November – but nationally, sales have dropped more than 25 percent, according to the data released by the Indiana Association of REALTORS®. By pre-2020 standards, Indiana's inventory is still so limited that the market still favors sellers.
Homes are selling near full list price on average, more than 7% over the median price of last year. Home values are still stable, even climbing, as we wait for demand to revive in 2023. There are encouraging signs for the future of Indiana real estate even as demand remains sluggish.
Indiana Housing Market Update
According to the data released by the Indiana Association of REALTORS®, the Indiana housing market showed signs of a recovery in March 2023 as homebuyers continued to return to the market. However, the low inventory levels and elevated mortgage rates continue to impact the market. Overall, the Indiana housing market seems to be heading in a positive direction, with sustained progress on inventory needed to relieve pressure on the market.
March Home Sales Rebound to 2022 Levels
Indiana’s home sales have rebounded, with a total of 6,643 closings in March 2023, falling just 72 properties shy of 2022. This represents a 30% increase from February. The number of new listings also increased by more than 30% from February.
Low Inventory Levels
Despite the increase in new listings, Indiana’s inventory of homes for sale dropped to a ten-month low, with a daily average of homes listed for sale dropping to around 9,200. This is due to the accelerated homebuying activity in 2023.
Median Days-on-Market and Median Sale Price
Indiana’s median days-on-market from listing to a pending contract dropped a full week as demand increased from February to March, from 23 to 16 days. The median sale price also increased modestly to $235,000, remaining 5% above March ’22.
More Balanced Market for Homebuyers
While the typical home sold faster and at a higher price in March, there were other signs of a more balanced market for homebuyers. On average, homes sold for 96% of asking price, compared to 100% of listing price last March and 97% across the past five years. Nearly 10% of March listings also had at least one price decrease as sellers adjusted expectations.
Impact of Elevated Mortgage Rates
The one-year anniversary of the Federal Reserve’s first of nine consecutive interest rate increases was in March. Elevated mortgage rates are impacting buyers and sellers despite recovering home sales in 2023. Current homeowners with mortgage rates locked in at less than 4% are more hesitant to list their homes and look for a new one with rates over 6%.
Regional Trends
Market trends were consistent across urban, suburban, and rural counties. All three areas saw a sharp increase in sales, a double-digit decline in inventory, and fewer new listings than last March. Rural counties experienced the fastest monthly price growth (+5%). Central Indiana drove the statewide growth in March home sales, with Hamilton County (+26%) and metro neighbors Madison (+22%) and Hancock (+16%) registering year-over-year increases.
Indianapolis Housing Market Trends
Marion County, located in the heart of Indiana, is home to the state capital, Indianapolis. The Marion County housing market saw a mix of positive and negative trends in March 2023. While closed sales increased and median sales price rose slightly, the decline in new listings and lower percent of original list price received may indicate a slight shift in the market towards buyers. Additionally, the increase in inventory and months supply of inventory suggests that the market is moving towards a more balanced state. Overall, these trends provide valuable insights for buyers and sellers
Increase in Closed Sales
According to the data released by the Indiana Association of REALTORS®, in March 2023, Marion County saw a 10.1% increase in closed sales compared to March 2022, with a total of 1,165 properties sold. This trend is consistent with the state's overall increase in home sales. The county's increase in home sales is an encouraging sign for the local market, showing that buyers are continuing to enter the market despite higher mortgage rates.
Decline in New Listings
New listings in Marion County saw a decline of 20.3% in March 2023 compared to March 2022, with a total of 1,281 new listings. This decline in new listings has been a common trend across the state and has contributed to a drop in inventory levels.
Increase in Median Sales Price
Marion County's median sales price for March 2023 was $230,000, which represents a modest increase of 2.2% compared to March 2022. This increase in median sales price indicates that home prices are still rising in the county, albeit at a slower pace than in previous years.
Lower Percent of Original List Price Received
In March 2023, the percent of the original list price received in Marion County was 95.6%, which is down 4.7% from March 2022. This decline suggests that buyers have more bargaining power in the current market, leading to more price negotiations.
Increase in Inventory of Homes for Sale
Marion County's inventory of homes for sale increased by 49.7% in March 2023 compared to March 2022, with a total of 1,323 homes on the market. This increase in inventory is a positive sign for buyers as it provides more options to choose from. However, it also suggests that the market may be shifting towards a more balanced state as inventory levels rise.
Rise in Months Supply of Inventory
Marion County's months' supply of inventory increased by 83.3% in March 2023 compared to March 2022, with a current supply of 1.1 months. However, a 1.1 months' supply of inventory is still indicative of a seller's market, and a balanced market typically has around 6 months' supply of inventory.
Indianapolis Real Estate Market Forecast 2023-2024
What are the Indianapolis real estate market predictions for 2023? The Indianapolis real estate market has been experiencing a steady growth in recent years, and the forecast for 2023-2024 suggests that the trend will continue. In this section, we will discuss the current market conditions and the forecast for the Indianapolis real estate market in the upcoming year.
Current Market Conditions
According to the Zillow Home Values Index, the average home value in the Indianapolis-Carmel-Anderson area is $268,266 as of April 30, 2023. This represents a 2.9% increase in value compared to the previous year. Additionally, the typical home value in the area is expected to increase by 6.2% over the next year, according to the 1-year market forecast.
The median sale to list ratio as of March 31, 2023, is 0.985, indicating that homes are selling close to their asking prices. Moreover, 20.2% of sales are closing above the list price, while 60.0% of sales are closing below the list price, showing that there is still some room for negotiation in the market.
The median days to pending as of April 30, 2023, is 7 days, which is an indication of the highly competitive nature of the market. Homes in the Indianapolis area are going under contract quickly, making it a challenge for buyers to find the right home and make an offer before it's too late.
Forecast for 2023-2024
The forecast for the Indianapolis real estate market for the next year is optimistic, with a projected 6.2% increase in home values. This growth is driven by the city's strong economy, low unemployment rates, and a surge in population growth. With many companies relocating to Indianapolis, the demand for homes is expected to continue to increase.
The Indianapolis housing market is expected to remain competitive, with many homes selling quickly and above the list price. However, buyers can still find opportunities for negotiation, especially with the increase in inventory levels.
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 $1,150.
This is an 18% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Indianapolis decreased by -4% to $1,204. The average rent for a 1-bedroom apartment decreased by -2% to $1,150, and the average rent for a 2-bedroom apartment increased by 6% to $1,275.
- The average rent for a 2-bedroom apartment in Indianapolis, IN is currently $1,275. This is a 16% increase compared to the previous year.
- The average rent for a 3-bedroom apartment in Indianapolis, IN is currently $1,515. 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 4% decrease 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.
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
There are some great neighborhoods in Indianapolis where you can consider buying investment properties. Here is a 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 in the Indianapolis area. The area is suburban with a total population of 4,419. 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, despite being a heavy commercial district. It is best known as the home of Glendale Town Center.
| Median Home Value in Glendale | $235,303 |
| Public Schools | A- Grade |
| Median Rent in Glendale | $874 |
| Housing | B Grade |
2. North Central, Indianapolis
North Central is one of the best neighborhoods to live in in the Indianapolis area. It is a suburban area with a population of 5,572. About 26% of the population are renters.
| Median Home Value in North Central | $309,728 |
| Public Schools | B+ Grade |
| Median Rent in North Central | $1,439 |
| Housing | A- Grade |
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 6,884.
| Median Home Value in Broad Ripple Village | $233,821 |
| Public Schools | B- Grade |
| Median Rent in Broad Ripple Village | $1,374 |
| Housing | A Grade |
4. Delaware Trails, Indianapolis
Delaware Trails is another best neighborhood to live in in the Indianapolis area. It is a suburban area with a population of 8,174. About 26% of the population are renters.
| Median Home Value in Delaware Trails | $218,641 |
| Public Schools | A- Grade |
| Median Rent in Delaware Trails | $864 |
| Housing | A- Grade |
5. Allisonville, Indianapolis
Allisonville is another best neighborhood to live in in the Indianapolis area. The area is suburban with a population of 10,175. 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 | $284,807 |
| Public Schools | A- Grade |
| Median Rent in Allisonville | $1,242 |
| Housing | A- Grade |
6. Millersville, Indianapolis
Millersville is an Indianapolis neighborhood with a population of 8,800. 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 | $176,736 |
| Public Schools | A- Grade |
| Median Rent in Butler-Tarkington | $1,006 |
| Housing | A- Grade |
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 in 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.
Let us know which real estate markets you consider best for real estate investing!
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.
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
