As rising home prices continue to remain polarizing in different parts of the country, the Indianapolis real estate market remains on course with the national average. The first quarter of 2016 saw home prices in Indianapolis dip just below the national average, settling at $146,900; while appreciation rates kept pace with the rest of the country. Prices for Indianapolis real estate continue to grow relative to last year, while equity gains in the last three years have extended the the trend of positive price growth since the recession. With the second-half of 2016 underway, the Indianapolis real estate market is expected to experience a healthy balance of price growth and total equity gains, combined with one of the most affordable housing markets in the nation.
Indianapolis, IN Real Estate Market Statistics:
The Indianapolis real estate market continues to be a tale of two cities — especially when it comes to short and long-term gains. While short-term equity appreciation rates are emulating the national average, Indianapolis real estate investors and homeowners seeking long-term investments are achieving the biggest gains. The one-year appreciation rate for Indianapolis real estate is 5.5 percent, compared to the national average of 6.1 percent, while the three-year appreciation rate is 20.4 percent compared to 22.6 percent. Price appreciation and principle payments in the last three years have boosted total equity growth for the Indianapolis real estate market since the recessions. For those considering Indianapolis real estate investments, the following provides a breakdown of appreciation rates in previous years:
- Homes purchased in the Indianapolis, IN housing market one year ago have appreciated, on average, by $10,036. The national average was $15,781 over the same period.
- Homes purchased in the Indianapolis, IN housing market three years ago have appreciated, on average, by $31,503. The national average was $49,356 over the same period.
- Homes purchased in the Indianapolis, IN housing market five years ago have appreciated, on average, by $43,199. The national average was $68,727 over the same period.
- Homes purchased in the Indianapolis, IN housing market seven years ago have appreciated, on average, by $62,017. The national average was $59,758 over the same period.
- Homes purchased in the Indianapolis, IN housing market nine years ago have appreciated, on average, by $48,680. The national average was $16,435 over the same period.
Appreciation rates for Indianapolis real estate remain fiercely competitive with the national average. As shown above, total equity gains are comparable with the rest of the country from year one till year five, with the national average only slightly ahead; However, appreciation gains picked up during the seven and nine-year mark. Homes in Indianapolis accrued $62,017 in equity compared to the national average of $59,758 during the seven-year mark, while a total equity of $48,680 was achieved in year nine, compared to the national average of $16,435.
As of July 2016, there are currently 3,409 properties in the Indianapolis area in some stage of foreclosure. According to RealtyTrac, the number of Indianapolis foreclosures in the month of July was 31 percent lower than the previous month and 16 percent lower than the same period in 2015. Conversely, the number of REO properties in Indianapolis increased 21.7 percent from the previous month and 26.4 percent from the same time last year. That said, Indianapolis real estate investments could pick up in coming years.
Indianapolis, IN: Real Estate Market Summary:
- Current Median Home Price: $146,900
- 1-Year Appreciation Rate: 5.5%
- 3-Year Appreciation Rate: 20.4%
- Unemployment Rate: 5.0%
- 1-Year Job Growth Rate: 1.6%
- Population: 852,866
- Median Household Income: $39,015
Indianapolis, IN: Real Estate Market (2016) — Q1 Updates:
The first quarter of 2016 has been somewhat tame for the Indianapolis real estate market, which isn’t necessarily a bad thing. Along with home prices and appreciation rates continuing to mimic the national average, the economy in Indianapolis has maintained a steady flow of positivity. The current unemployment rate for Indianapolis is the same as the national average at 5.0 percent; however, one-year job growth remains an issue, as the one-year job growth rate for Indianapolis is 1.6 percent, below the national average of 2.0 percent. Although employment growth has eased, the Indianapolis’s labor markets is more resilient than the national average, which should bode well for Indianapolis real estate investors moving forward.
In terms of the Indianapolis housing market, the one major advantage for homeowners and renters alike is affordability. As one of the more affordable housing markets in the country, homeowners in Indianapolis paid 6.8 percent of their income on monthly mortgage payments during the first quarter, compared to the national average of 14.5 percent. That number is actually lower than the city’s historical average of 9.0 percent, which is more than two times less than the nation.
Another aspect for Indianapolis real estate investors and homeowners to consider is new housing construction. The current level of construction for Indianapolis is 20.8 percent above the long-term average; however, the number of single-family housing permits is a mere 5.3 percent, which is drastically lower than the national average of 11.3 percent. This could either benefit or affect seller sentiment moving forward, and could also trickle down on Indianapolis real estate investing.
Moving forward, the Indianapolis real estate market should see vanilla growth in the second-half of 2016. The National Association of Realtors (NAR) forecasts weaker price growth in Indiana than in the U.S. in the next 12 months, with price expectations for Indiana real estate currently at 3.3 percent, compared to the national average of 3.8 percent. That said, the Indianapolis real estate market should remain on pace with the national average.