Note: Our market forecast includes Indianapolis data and data from its surroundings, including Carmel and Anderson, Indiana.
Known to the locals simply as Indy, Indianapolis is the state capital of Indiana. It’s also the state’s most densely populated city. According to 2019 estimates from the U.S. Census Bureau, it is home to over 886,000 people, making it the 17th most populous city in the United States.
The city is perhaps best known for hosting the Indianapolis 500. However, in addition to NASCAR racing, Indianapolis is home to a number of Fortune 500 companies, including Simon Property Group (NYSE: SPG), two major-league sports teams, a handful of public and private universities, and the world’s largest children’s museum.
The state of the market
Many major cities have been hit hard by the pandemic, and Indianapolis is no exception. While the city will likely make a recovery, especially as the vaccine rollout continues, there’s still a lot that investors need to consider before deciding to add this location to their portfolio. With that in mind, we’ve brought you three of the biggest trends you need to be aware of right now.
Home prices are rising but remain fairly affordable
Thanks to the current inventory shortage gripping the nation, home prices in Indianapolis have risen 7% on a year-over-year basis. However, Indianapolis’s increased median price of $225,000 is still well more than $100,000 less than the current national average of $353,000.
Rents are up, but so are rental vacancies
Following another national trend we’ve seen in large cities, rental vacancies are up in Indianapolis almost 11% this year. That said, while rent prices have plummeted in other cities in an attempt to fill those vacancies, that is not the case in Indianapolis. The median rent price in the city has risen 8.5% and is now up to $1,292.
Mortgage delinquencies are increasing, but the foreclosure rate is down
Mortgage delinquencies have increased by 1.1% over the last year, likely due to the spike in unemployment amid the pandemic. Yet it seems like many of the financial relief measures put in place by the federal and state government have paid off because, despite the fact that more homeowners are behind on their payments, the foreclosure rate has actually dropped 0.1% on a year-over-year basis.
Indianapolis housing demand indicators
All data and charts supplied by Housing Tides by EnergyLogic.
Despite a higher-than-usual unemployment rate and rising home prices, there are still quite a few reasons why investors may want to consider Indianapolis.
Unemployment trends
Although unemployment is up in Indianapolis on a year-over-year basis, that fact is hardly surprising. Many cities have experienced surges in joblessness during the pandemic.
However, it’s worth noting that, even at its peak of 12.8% in April 2020, the unemployment rate in Railroad City was still below the national average. In addition, since then, it has dropped to just 4.5%, an 8.3% decrease within the last few months.